Thursday, March 31, 2011

Maharashtra to create fund for towns affected by power projects

In a bid to placate environmentalists and local residents at the sites of thermal power projects that will together produce nearly 20,000 megawatt (MW), Maharashtra is creating a special fund for infrastructure development in towns and villages where such plants are coming up.

The projects either are in the construction phase or are being planned in the state by both public sector as well as private utilities.

The fund will be created by levying a surcharge on value-added tax (VAT) on the sale of electricity collected from power producers and traders, and electricity duty that consumers pay.

State energy secretary Subrat Ratho said discussions are being held on the level of this surcharge and who should pay. “We expect to complete the discussion in two-three weeks,” he said.

State finance and energy minister Ajit Pawar had announced the creation of such a fund during his budget speech earlier this month, without elaborating.

“As the percentage of surcharge is not fixed yet, it’s difficult to make any guess on the amount that we will be able to collect for the development of project-affected localities,” Ratho said. He said this would be the first such fund by any Indian state.

The tariff will rise but not by a significant amount, he said.

The first such pilot project will be implemented in Chandrapur—a district town in eastern Vidarbha with a population of 350,000 and home to the state super thermal power station (STPS) that generates 2,340MW. It’s owned by state power utility Maharashtra State Power Generation Co. Ltd (Mahagenco), India’s second largest power producer after NTPC Ltd. The estimated cost of the pilot project is Rs.250 crore.

“During my recent visit to the STPS, many elected representatives from the area and members of civil society met me and complained that they are suffering from pollution for the sake of entire Maharashtra but they do not have access to basic amenities like good roads and health services,” Pawar said.

“I found their complaints are justified. So we decided to create a special fund to address the needs of the local population. This fund will not only be used for towns and villages where Mahagenco’s projects are located, but also for private power projects which are coming up in a big way in the state.”

Suresh Chopne, a lecturer at Chandrapur College and president of Green Planet Society, a non-profit organization, said pollution from the thermal power plant was an issue, but a greater menace was the traffic congestion and rising pollution due to movement of trucks that go in and out of STPS supplying coal to the plant or ferrying fly ash. “We need better and wider roads, flyovers in our town to ensure smooth movement of vehicles,” he said. He also demanded a super-speciality hospital to treat people suffering from pollution-related ailments.

According to Vivek Bhide, an activist from the Konkan region, where around 10,000MW of thermal power projects are coming up, said the water discharge from JSW Energy Ltd’s 1200MW project at Jaigad in Ratnagiri district contains sodium chloride and has contaminated the groundwater.

An email query sent to a JSW Energy spokesperson remained unanswered.

Shantanu Dixit of Pune-based think tank Prayas Energy Group that specializes in energy-related issues said the government move is welcome, but “we also need to see the impact on the cost of power for consumers”.

According to him, before sanctioning any thermal power projects, environmental-impact assessment should be carried out for the entire region where projects are coming up. Currently, individual projects are being assessed independently, he said.

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