Business IdeasADAG eyes alternative locations for power plant if Dadri fails
The governments of Maharashtra, Gujarat and Andhra Pradesh have started talks with the Anil Dhirubhai Ambani Group (ADAG) for a possible relocation of the 8,000-Mw Dadri gas-based power plant from Uttar Pradesh.
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All these states are on the east-west gas pipeline (which runs from Kakinada to the west coast) built by the Mukesh Ambani group. Under an agreement, ADAG holds rights to transport gas from Reliance Industries" Krishna-Godavari fields to any gas-based power plant, not specifically for Dadri.
The move comes a few days after Reliance Power’s plans to set up the largest gas-fired power project in a single location for Rs 30,000 crore at Dadri ran into problems with the Allahabad High Court quashing a notification by the Uttar Pradesh government for using its emergency powers to buy land for the group and side-stepping a provision inviting objections from land owners.
The state government will now have to invite objections from farmers, who have the option of either returning the compensation they were paid to reclaim the land or forfeit any claim. Farmers have already given about 2,500 acres for the project.
Asked about alternative locations, a senior Reliance Power official said: “We are fully committed to setting up world-class power projects that will deliver affordable power to the Indian consumer. While we remain committed to making a significant impact in Uttar Pradesh, to serve customers in north India, we are evaluating the interest shown by other state governments to invest in their state in this critical sector.”
ADAG is building a 1,400-Mw gas-based power plant in Sambalpur, Andhra Pradesh where there is scope to expand capacity because additional land is available. Approvals for the expansion are at an advanced stage.
The company is also setting up a 4,000-Mw gas-based power plant in Shahpur, Maharashtra, which has received all approvals.
Land acquisition for this project has also picked up after the state elections and talks are on for expanding the capacity of the plant if Dadri does not work out.
The company is also setting up a 4,000-Mw gas-powered plant in Gujarat in Baruch, which has the scope to expand to 7,000 Mw. Two sites near Baruch have been identified, most of it government land. Discussions have been held on the potential of expanding the capacity of the project by relocating the investment of Dadri.
The western region is suffering from large power deficits which is why the states in the region have been encouraging investors to set up power capacities.
Sources say the bids for the EPC contract to build 8,000 Mw of power plants are being negotiated for both Dadri as well as the Mumbai project which will provide ADAG the flexibility to relocate.
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: Dec 5: Setback for Reliance Power’s Dadri plant