HYDERABAD: Chief Minister Y. S. Rajasekhara Reddy is understood to have given the nod to the Hindujas to set up a thermal power station at Visakhapatnam following the latter's offer to sell power to other States if its rates were not feasible for Andhra Pradesh.

Dr. Reddy is said to have accepted the proposal in principle when the Hinduja brothers called on him here on Monday. His contention is that any new power project is welcome considering that Andhra Pradesh needs an additional 6,000 to 8,000 Mw of power in the next five to six years.

By the same token, the Chief Minister is said to be keen on reviving the power purchase agreement (PPA) with M/s BPL Power Projects which lapsed when the company failed to achieve financial closure by the stipulated date - July 2003. Sources said the green signal would be given to M/s BPL if it agrees to supply power at around Rs. 1.70 a unit - the same as the unit proposed at NTPC's thermal unit at Bhoopalapalli in Warangal district.

A decade-long plan

The Hindujas had proposed nearly a decade ago to set up a 1,000 MW power project at Vizag. It never took off for lack of subsequent interest by the company and the then TDP Government's refusal to accept the high tariff. Today, the TDP warned of an agitation if the Government accepted the cost of generation at Rs. 5.5 crore per mega watt and if it was not linked to tariff. Sources said the Chief Minister does not buy this argument since the Hindjuas' project would create thousands of jobs and generate taxes.

The BPL merits

Revival of the BPL project is sought to be justified on several counts -- its location in the backward Telangana and at a coal pit-head and the Centre's suggestion to examine the possibility of re-instating the PPA. A final decision will be taken by the six-member committee headed by the Finance Minister, sources said.

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