The existing provision helps state companies such as NTPCBSE 0.75 % to develop projects smoothly, but private firms face numerous obstacles in securing approvals and clearances required for identifying the appropriate patch of land to plant trees in lieu of forest land that a project needs. The power ministry wants now wants the same provision to be applied to all companies. However, the power ministry has proposed that developers of ultra mega power projects be asked to pay for afforestation although state governments should identify the non-forest land.
"We have approached the Cabinet Committee on Infrastructure for tweaking the compensatory afforestation norms for the Tilaiya ultra mega power project in Jharkhand. If approved, the change would benefit both existing and future ultra mega power projects," a senior power ministry official said.
Compensatory afforestation rule is one of the most important conditions stipulated by the central government under the forest conservation Act while diverting forestland and requires companies to identify an equal area of non-forest land in the same state.
The proposal is part of the government's efforts to revive investment and clear obstacles that have stalled giant projects such as UMPPs. Reliance PowerBSE 1.72 % bagged the 3,960 mw ultra mega power project at Tilaiya in 2009 and planned to commission the first unit by May 2015. The company has not been able to start work as the state government has not handed over land to the company. The company has received forest clearance for 1,220 acres of forest land but is still awaiting final handover from the state government.
Nearly 80% of land required for the project and attached coal mines fall under forest area. Reliance Power had ordered the main plant equipment for the Tilaiya project from China's Shanghai Electric, but is still in discussions with domestic and international banks for financial closure. The proposal would also benefit developers of future ultra mega power projects. The government has called bids for two such projects at Bedhabahal in Orissa and Cheyyur in Tamil Nadu.