Should UPCL be closed down…?

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By Philip Mudartha, Qatar
Bellevision Media Network

Doha, 14 March 2011: The farmers in villages around Udupi Power Corporation Limited (UPCL) are aggrieved. Their soil, water, and air are polluted. Their traditional livelihood is threatened. The yields and incomes from agriculture, floriculture and horticulture are dwindling, which they ascribe to damage to local environment. The damage is ascribed to fly ash, bottom ash, effluent water, particulate and obnoxious chimney gas emissions.



The grievances are legitimate and therefore require genuine solutions. Solutions embedded in total quality management system would be sustainable and address their current and future concerns. Therefore, it is prudent to examine the issues entirely, in both historical, political and technical backgrounds. I will do this in separate parts, beginning with history of the project.


For decades, the chorus has been the lack of development at village, block, district and state level. The coastal belt hardly saw any industrial development. This was attributed to power shortage and  undeveloped infrastructure mostly poor sea, rail and road linkages. Load shedding was routine. Even with the absence of heavy industries, existing water pumps in the agricultural sector and households had to go without power for long hours. Establishing of power station was a longstanding demand of the region since the early eighties. A long struggle ensued for realizing this demand.


In 1987, Karnataka Power Corporation Limited (KPCL) proposed to set up a 2x210 MW coal-based thermal power plant at Nandikur near Padubidri. KPCL carried out preliminary project work such as surveys, environment studies etc. However,  local opposition killed its hopes.


In 1989, National Thermal Power Corporation (NTPC) proposed its 2x210 MW capacity plant at the same place in collaboration with Soviet Union, with final capacity pegged at 2,420 MW. Litigations and disintegration of Soviet Union killed the initiative. 
After NTPC backed out, the state government invited private parties to invest in power project. Cogentrix of USA and Lanco Infratech Limited (Lanco Group) submitted bids and were allotted 1,000 MW each by 1996.



Lanco Group formed UPCL as a wholly owned subsidiary to own and execute the project  and took possession of state allocated land in Yellur by 1999. However, Cogentrix was frustrated by prolonged litigations, local opposition and consequent delays. By 2010, UPCL completed erection of 2x600MW plants and commissioned the first unit. In early 2011, Lanco Group is reported to have finalized project plans and secured approvals for doubling the generation capacity with two more units of 660MW each on the land acquired for Cogentrix project. If this project is completed by 2020, the mega power plant will produce 2520MW, realizing 1989-dream after three decades. Surely, it will bring in new challenges, opportunities and grievances.


Will this dream come true? Is Lanco Group capable to execute the project? From its track records, it sure should. It is a diversified infrastructure development company with its Corporate Office in Gurgaon, Haryana. It is a publicly listed Indian company and last traded price on National Stock Exchange (NSE) is Rs36.55. It  incorporated UPCL as a wholly owned subsidiary with the financial structure of 20% equity and 80% debt. The debt is arranged through a consortium of 14 major banks led by Power Finance Corporation. Therefore, most of the invested money has come from the general public. How much of our money has been invested?


The original project cost for 2x600 units was 4320 crores of rupees, but UPCL has so far spent 5689 crores. The plants are yet to reach the designed capacities. They have to address process issues, safety risks, health hazards, environment impacts. They have to receive full consent to operate (CTO) with necessary certifications per global norms. ISO9000:2008, ISO20000:2004 and OSHA18000 are minimal HSEQ certifications required. When full 1200MW power is uploaded to the national grid, the expenditure migth reach 6000 crores. This does not include the money Karnataka Power Transmission Corporation Ltd (KPTCL) has to invest for the establishment of a 400Kva line to evacuate the power into the national power distribution network.



With the commencement nominal production of 55W out of planned 600MW from the first unit of UPCL on 3 June 2010, this  decade’s long struggle finally came to end. Six months later, the generation is reportedly 500MW. This is because KPTCL operates its 210Kva line only.  The 400Kva line is not yet installed. The second unit is ready but can commission only after KPTCL can evacuate the power under the Power Purchase Agreement (PPA) signed in 2005.


The estimated investment for the 1320MW second phase is 6930 crores of rupees Once again, money that belongs to you and me. And should it go to waste, if the local opposition steamrolls into shutting down the plants under ’UPCL hatao Andolan"?



Comments on this Article
Philip Mudartha, Qatar Tue, July-5-2011, 10:33
Jyotibp, if you are a research student specialized in environmental engineering and studies, I would be pleased to sample your essays here. If you an ideologue, social or political, that is another story.
JYOTHIBP, SHIMOGA Mon, July-4-2011, 4:36
This plant should be shut down.Its environmental impact is more than its use. I am doing an research work on it..
Philip Mudartha, Qatar Fri, March-18-2011, 4:12
The road to economic development cannot be built without any cost. In seeking to raise our incomes, to spend more on goods and services that raise our standards of living, we give our consent to inevitable change. The change need not always be liked by an individual or a group of individuals as it has adversely affected their interests of the time. Hence change has to be managed, or left to the times to self-manage. The environmentalists, local pressure groups and stakeholders are within their rights to protest and air their grievances publicly. Without this activism, priorities risk towards short term growth which will not sustain. That it took nearly 30 years for a dream to come true and when it came true left a bitter taste is evidence that our polity functions less on rules anchored in values and principles and relies more on arbitrariness of decision makers, despite being democratic. This is changing too, and the debate ensured by the controversies is a good thing. yet, we should not throw the baby out with the tub water, as the euphemism goes. UPCL must stay, it must expand, change our lives for better. It is possible with principled centered choices by all stakeholders.
Stany Quadros, Udupi / Sharjah Tue, March-15-2011, 4:30
Environement friendly power plants are preferable. But most important is to enforce the law with heavy penalties to those who do not comply with the safety parameters and guidelines.
Joe Dsouza, Mangalore Tue, March-15-2011, 3:29
There is regular power cuts in South Kenara and Udupi Districts now a days. How shall we solve this power problem. May be wind turbines, which are environemental friendly?
Harush, Bantakal Mon, March-14-2011, 12:48
Around 15 years back Mr. Ravindranath Shanbougue, of Bahujan Hithaya, Bhaujana Sukaya fame gave a speech about the impacts of this plant. It was then named Kojentrix and I remember we took a mrach against it. Then suddenly it was out of people s memory. In a country like India where there is no value for a person s life and only money rules, we can t blame anyone for this disaster. As we are used to take things lightly and not aware of our rights we are bound to suffer. Why only in India the environmental standards are not stringent? even if they are in the books why there is no strict implementation and regulation of them? Because we are not aware of them. Ignorance is not a bliss. Better late than never. I hope the unity shown against this plant will not die down soon as it happened when the project was announced
Veena Deepak, Belle/Udupi Mon, March-14-2011, 10:25
First we should protest for two more plants for which company planning to initiate,thereby we can stop furher damage to our environment.Second unit already started it s production.There should be strict measures to curb pollution like setting up cement plant immidiatly and controlling smoke and waste water or with some minimum alterations this plant can be converted into Gas Based Power plant.This may be the ideal solution for everything.
Gananath B Shetty, Nandikur/Mumbai Mon, March-14-2011, 6:53
The Central Regulatory Commission (CERC) has not approved the tariff rate for the project. At present the power purchase is made illegally at higher prices by Govt(KPTCL Power corp of K taka). UPCL terminated the agreement with BHEL purchased cheaper old equipments from China. Politicians
Bhaskar Achar, Padubidri Mon, March-14-2011, 2:36
Our polititions should take responsibility for wasting public money and creating this nusense. Investigating agencies should come up with report to expose the people who all are involved in this mess.
Francis Noronha, Mumbai Mon, March-14-2011, 2:28
This is nothing but "take it easy policy" from the government. Utmost priority should be given for health and environmental safety. This may create another environmental disaster in near future if proper preventive measures are not taken now.
Benedict Noronha, Udupi Sun, March-13-2011, 10:54
I say no to your question Mr Mudartha. There is some vested interest playing foul and causing all the problems. The Government has bungled in the matter. The company has not executed the promised steps of safety and essenstial works. There are solutions for the problem as it was explained through audio-visuals, before the approval and the tank to secure ash flowing through pipes woth ash and water should have been done. It is said that inspite of getting compensation some vested interests, claiming more compensation have not vacatd their houses and property. I think to chase them out the mischief is played by the company and the government combine. People and the so called political leaders are nit sincere and honest. Therefore before shutting down the plaants the leaders who are cause for this must be put behind the bars and the work should be completed. In the mean time until the exams are over and the rains set in the power generation must go on, what ever be the trouble. Honest people have suffered, could be compensated.
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