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Land acquisition difficulties India aluminum industry halted 2400 megawatts coal-fired power station project

The management of NTPC and Nalco decided to cancel the 2,400 MW Gajamara coal-fired power plant in Dhenkanal, Orissa.

The project should have provided power for Nalco smelter, which is 60 kilometers away from the District of angel. Nalco is planning a brownfield expansion at Angul's aluminium smelter, with an additional capacity of 500,000 tons a year and an estimated capital expenditure of Rs 100 billion.

A senior NTPC official, who declined to be named, said NPTC management had transferred more than 1 billion rupees to the Orissa government for land acquisition. The money has been transferred to landowners, but they continue to demand higher compensation. Some land owners even approached the court to seek higher value for their plots.

The official said that in fact, the money had been transferred to the landowner, but NTPC did not get the land.

In December 2016, both PSUs signed a memorandum of understanding for the development of power projects and other business cooperation in India. Under the MOU, the two companies will establish power plants through a joint venture NTPC-Nalco Power Company (NNPC). However, the agreement has been cancelled.

NNPC's first power plant is planned for Gajamara construction. The supercritical power plant costs 140 billion rupees and consists of three power generating facilities with a single installed capacity of 800 megawatts. The plant will provide uninterrupted power for the Angul smelter of India aluminum. But electric power projects have been involved in coal linkage and land expropriation.

The official said the acquisition of 1,600 acres of land in Gajamara met with opposition from local farmers and today led NTPC management to write off a billion rupees of costs.

As of press release, India state power company NTPC and India aluminum Nalco management did not make any comments.