REC to fund two power projects in Tamil Nadu (Lead)

October 10th, 2008 - 9:33 pm ICT by IANS  

Chennai, Oct 10 (IANS) Even as two major power projects worth Rs.56.12 billion were announced Friday, the state’s electricity department said more electricity outages would be effected - some lasting as many as four hours every day besides a weekly shutdown.S. Machendranathan, chairman of the Tamil Nadu Electricity Board (TNEB) told reporters that existing load shedding in the capital would be increased by one hour while in some rural areas it may last six hours depending on the necessities of each region.

“An unexpected failure of monsoon in the south and a shortfall in wind-generated power due to unexplained calmness in the atmosphere have contributed to power-shortage. Further, since our requests to industries to eschew usage during peak hours in the evening went unheeded, we were forced to announce further power-cuts to ease the situation in households,” Machendranathan said.

One of the two projects expected to generate 1600 MW of power too have a flip side.

One of the collaborators of the mega-projects - Neyveli Lignite Corporation - continues to be under threat of a strike notice issued by labour unions affiliated to the opposition Pattali Makkal Katchi and the ruling Dravida Munnetra Kazhagam.

Talks with the unions demanding pay hikes, bonus and festival advances are continuing. The PMK union has still not withdrawn its notice to strike work at the stroke of midnight Friday.

Meanwhile, the memorandums of understanding (MOU) for the power projects were signed here Friday between TNEB and REC at the state Secretariat in the presence of chief minister M. Karunanidhi.

The agreement envisages REC lending Rs.34.37 billion to NLC Tamil Nadu Power Limited - an 89:11 joint-venture between Neyveli Lignite Corporation (NLC) and TNEB - that is promoting a 1,000 MW thermal project at Tuticorin.

REC will also lend Rs.21.75 billion to TNEB for adding another 600 MW capacity at its North Madras Thermal Power Station.

The two projects would involve a total outlay of Rs.76.27 billion — with NLC Tamil Nadu Power at Rs.49.09 billion, and North Madras Thermal at Rs.27.18 billion.

The state government has, meanwhile, decided to unbundled TNEB into two outfits, one to look after the transmission aspect and the other to manage generation and distribution. A committee will go into the issue of restructuring TNEB.

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