LoA for 1,600 MW power project in Jharkhand’s Chandrapura to be issued by 2026-end, says DVC

Damodar Valley Corporation holds press conference to defend tariff hike amid rising costs as Steel plant in West Bengal seeks Chief Ministers intervention in rising tariffs
| Photo Credit:
DEBASISH BHADURI

A Letter of Award (LoA) for the execution of the coal-fired 1,600 MW ultra-supercritical power project in Jharkhand’s Chandrapura, a proposed joint-venture between Coal India and Damodar Valley Corporation, is likely to be issued by 2026-end.

State-run power utility Damodar Valley Corporation (DVC) and Coal India signed a Memorandum of Understanding (MoU) in April to set up the brownfield project of 2 X 800 MW power plants — an expansion of the existing Chandrapura thermal power station of 2 X 250 MW capacity.

“We have signed a formal agreement with Coal India for this brownfield project, which will be set up on our land. A LoA is likely to be issued by this year-end. Around 38 months will be needed for completion of the construction work. This project is expected to be fully commissioned by 2030,” DVC Chairman S Suresh Kumar said on Friday.

For the power project, a joint-venture company would be set up on a 50 per cent equity sharing basis, Coal India said in a stock exchange filing on April 21. Total investment would be around ₹16,500 crore for setting up of the project.

“DVC and Coal India will together borrow around 70 per cent of the total project cost over a period of time,” Kumar said.

Coal for the proposed power plants would be sourced from coalfields in the proximity from Coal India’s subsidiary companies– Bharat Coking Coal and Central Coalfields.

The command area of the Kolkata-headquartered Damodar Valley Corporation, jointly owned by West Bengal, Jharkhand and the Centre, is spread over the two States. The power utility’s main functions are generation, transmission and distribution of electricity in its command area.

However, respective electricity regulatory commissions of the two States currently decide upon their end-consumer power tariffs.

tariff difference

DVC has approached the West Bengal and Jharkhand Governments for consent to form a joint electricity regulatory commission for a uniform tariff for its consumers in the two different States.

“We had approached the Union Power Ministry for a joint electricity regulatory commission. The Ministry directed us to approach the two State governments for their consents. Accordingly, we have approached the two States. They are now studying it,” Kumar added.

According to DVC, due to the tariff difference in the two States, there has been a significant amount of litigation happening. And what it needs is one tariff order for the entire DVC area.

Meanwhile, trade bodies representing the steel and ferro-alloy industry in West Bengal have sought Chief Minister Mamata Banerjee’s help to reduce the alleged steep hike in power tariff by DVC, which they claim would lead to a shutdown of operations.

“The appeal comprised a number of factual inaccuracies and inconsistencies which are completely one sided and have not been brought out in their appeal,” DVC said in a statement on Friday.

In a joint statement, the Damodar Valley Power Consumers Association, the Steel Re-Rolling Mills Association of India and the West Bengal Sponge Iron Manufacturers Association claimed that the revised power tariff approved by the West Bengal Electricity Regulatory Commission (WBERC) for DVC sets the rate at ₹4.64 per unit for 2025–26.

“West Bengal is the second-largest contributor to India’s secondary steel production, ferro alloys, pig iron, and pellets, and third in sponge iron output. Collapse of this sector will endanger the livelihoods of lakhs of people,” the industry bodies warned.

DVC said its tariff within West Bengal has remained static over the years as the associations have litigated at various fora since 2007 for various reasons which are not tenable as per the order of Supreme Court in 2018.

“The above associations subsequently have then litigated against the payment of arrears which became effective again at various fora which was closed by the Supreme Court in 2025 with a direction to pay arrears within a time period of two months. DVC has all along complied with the order of the courts and had been very patient with the associations,” the power utility added in the statement.

Published on May 30, 2025