Bihar - new Power secor

Investors’ confidence in Bihar’s power sector is set to get a further boost, with the Nitish Kumar-led JD (U)-BJP alliance returning to power with an absolute majority in the recent assembly polls. Bihar has attracted the attention of power sector investors during Kumar’s previous term as chief minister.
Central utilities like NTPC, which had turned cautious about investing in Bihar over the deteriorated law and order situation in the state and also because of the weak financial health of the state electricity board, seem to have changed its mind.

Significantly, NTPC’s tripartite agreement with Bihar and the Union finance ministry, which secures payment for power supplied to the state, is valid only till 2016. NTPC then was reluctant to set up more power plants in the state. But now it does not seem to have any such reservations. The central utility is setting up 1,320 MW Barh-II in the state. It is.eveloping another plant, 1,000 MW Nabinagar thermal power project, in partnership with the Indian Railways. NTPC has only recently commissioned its Kahalgaon expansion power project in Bihar.
Meanwhile, NTPC has also partnered the BSEB to revive the latter’s defunct Muzaffarpur thermal plant. The contract for implementing the revival plan has been awarded to Bhel.

Bhel is also implementing BSEB’s renovation and modernization plan for the unit 6 and 7 of the Barauni thermal power plant, for which equipment were earlier supplied by the public sector company.

The Nuclear Power Corporation (NPCIL) has also shown an interest in setting up a 2,800 MW nuclear plant in the state. The state is likely to see more investment from central utilities in power generation as the law and order there further improves and industrial activities pick up.

After assuming office in November 2005, Nitish focused on improving the investment climate in Bihar by tackling the law..and order problem. His efforts have paid rich dividends, with private investors thronging to the state with project proposals. However, law and order is still an issue hampering investment.
Bihar, which had no independent power project earlier, has received proposals from private players for setting up projects worth 20,000 MW after Nitish became chief minister in 2005. Of this, about 10,000 MW capacity is under construction and expected to be commissioned in the 12thPlan. The balance capacity is meant for benefits during the 13thPlan. Besides, NPCIL plans to put up four units of 700-MW pressurised heavy water reactors at Rajauli, Nawada.

Meanwhile, the BSEB is implementing projects worth 2,860 MW. Of this, 500 MW is being added on its own and the rest under a joint venture with NTPC. The entire 2,860 MW capacity is expected to be commissioned during the 12thPl