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Cabinet clears coal linkages to Barh power project

Ahead of assembly elections in Bihar, the Union Government has sanctioned coal linkages to Barh power project in the state to halve the cost of generating 1,320 MW of electricity. Besides, an additional allocation of Rs 1,850 crore has been made to improve power situation in the state, Power Minister Piyush Goyal said at a post-Cabinet briefing barely an hour before the Election Commission announced five-phase assembly elections in Bihar. Bihar will get 1,010 MW out of 1,320 MW power to be generated at state-owned NTPC's Barh plant at a variable cost of Rs 2 per unit as compared to Rs 4.15 currently. "There was no coal linkage for Barh power plant in Bihar. The power plant was purchasing coal directly from the market which resulted in underutilisation of capacity as well as rise in cost of power. "Now it has been given coal linkage which would help it reducing variable cost of power from Rs 4.15 per unit to Rs 2 per unit," he said. He further informed that the the decision regarding providing coal linkage to the Barh project was taken yesterday. NTPC's Barh project's 660 MW capacity was operational. Now the decision will enable the state run utility to operationalise the remaining 660 MW by next month, the minister said. Goyal also informed that 1,010 MW will be given to Bihar from NTPCBSE 5.50 % (Barh) plant. "This (decision) has been taken so that people of Bihar get relief of Rs 1,500 crore as electricity rates will go down." The minister further said that against the investment plan of Rs 6,106 crore for Bihar under the Deen Dayal Upadhyaya Gram Jyoti Yojana and Integrated Power Development Scheme (IDPS) the government has approved Rs 7,956 crore. He said that Rs 1,850 crore (additional amount under DDGJY and IPDS) has been approved for Bihar so that electricity can be provided to the state reeling under outages. Goyal said these decisions are part of Prime Minister Narendra Modi's commitment to provide 24X7 power in the state and supply power to five crore people who don't have access to electricity.

source: http://www.moneycontrol.com