NTPC's Solapur project cost likely to go up Rs. 500 cr.

The project cost of NTPC's Solapur thermal power plant, estimated at Rs. 12,000 crore, could increase by Rs. 500 crore, due to additional compensation sought by the project-affected families. It could result in a hike in the power tariff for consumers in five States, where the company has entered into a long-term power purchase agreement.

Back-of-the-envelope calculations suggest that power tariff could increase between 5 and 10 paise for all consumers in the five States. Power purchase agreements have been signed with electricity distribution companies in Maharashtra, Tamil Nadu, Jharkhand, Madhya Pradesh and Goa. Out of the total available power, Maharashtra will get 55 per cent.

Recently, during the State Rehabilitation Authority meeting, Maharashtra Government agreed to the demands for additional compensation. But NTPC is no mood to accept the demands.

In a letter to the Secretary (Relief and Rehabilitation) of Maharashtra Government, the company said power cost from the plant is already very high and additional financial burden will make the plant unviable.

HBL