Three prominent coal and water rich states Bihar, Jharkhand and Uttar Pradesh have decided to set up a power project under the joint venture route. The states have approached the power ministry for approval to set up a 1,300 mw coal fired project with Rs 6,000 crore investment. The project would use coal from closely located 4-5 blocks located in the states.
"Bihar, Jharkhand and Uttar Pradesh are in talks with the power ministry for the proposed JV project. The proposal may be given approval soon after Central Electricity Authority (CEA) completes the feasibility study for the project," a highly-placed power ministry source told ET.
Sources said there are chances of the project being situated in Bihar as it would be easy to source coal from all the three points. The state also has abundant water required for the project. The states may share power on the basis of equity contribution.
The coal blocks that would be used for the project were earlier reserved for tariff based competitive bidding by power companies. However, the state governments have favoured a large single project instead of smaller capacities at different locations. The power ministry is also in favour of commissioning large projects as it gives economies of scale and helps in cutting down the cost of power for consumers.
