The Cheyyur UMPP comprising of five units of 800 MW was estimated to be built at the cost of Rs 24,200 crore with Tangedco being the major beneficiary with allocation of 1,600 MW of power while other utilities in the southern states will share the rest of the power.

“As most utilities have opted out, the project proponent Power Finance Corporation has proposed for the closure of the mega power project. Tangedco’s board should formally take the closure decision which would be communicated to the Centre,” said sources in Tangedco. The Centre planned to set up the UMPP at Cheyyur for the benefit of the power deficit southern states with private sector participation through the Power Finance Corporation way back in 2008, a senior Tangedco official said, adding that the project ran into several obstacles from the delay in the land acquisition to environmental concerns raised by the local people. In February last year, the Union Environment Ministry denied the environment clearance after the fuel source was changed from imported coal to domestic coal which requires additional land acquisition.

Sources said that now Tangedco may consider setting up its own thermal power plant. When asked why the other utilities backed out, the official said it was primarily due to delay and many states developed their own generation capacities.