Reliance Power's R40,000 crore-ultra mega power project (UMPP), for which forest land has been acquired, can comply with its compensatory afforestation obligation by paying money in lieu of alternate land on par with a central public sector project.
The cabinet committee on investment (CCI) in its meeting on Wednesday approved a proposal to relax the forest land diversion guideline for the project on the ground that it is being sponsored by the central government.
Significantly, the ministry of environment and forests (MoEF) under Jayanthi Natarajan had strongly opposed the power ministry's proposal to grant this concession to a private project on the apprehension that such a decision could be challenged in the Supreme Court or the National Green Tribunal. Further, the MoEF also expressed concern that putting the Tilaiya UMPP on par with a central public sector project could attract adverse observations from the government auditor as happened in the case of the Sasan UMPP.
But after Natrajan's exit from the MoEF, the ministry seems to have set aside its stated concerns.
The CCI exemption will allow the developer to save on time required in acquiring alternate land for compensatory afforestation and expedite implementation work on the project.
Under the Forest Conservation Act, 1980, private companies have to provide land for compensatory afforestation when they acquire forest land for projects. However, central public sector projects can fulfill their obligation by paying money in lieu of land. Reliance Power bagged the Tilaiya UMPP in competitive bidding in 2009 by quoting the lowest levelised tariff, R1.77 a unit. As many as 18 power discoms have signed power purchase agreements to buy electricity from the project.
Jharkhand Integrated Po-wer, the special purpose vehicle set up for implementing the Tilaiya UMPP, has acquired land and secured environmental clearances.
But due to lack of clarity over how the developer will comply with compensatory afforestation obligations, the Jharkhand government has held back transfer of the acquired forest for the project.