Financial Daily from THE HINDU group of publications
Thursday, Mar 24, 2005
Industry & Economy - Environment
Setting up of flu gas desulphurisation unit Environment body asks Reliance Energy to pay Rs 300 cr
Mumbai , March 23
RELIANCE Energy Ltd has been asked to furnish a bank guarantee of Rs 300 crore to prove that the company is serious about setting up a flu gas desulphurisation (FGD) unit, essential for controlling pollution, at its 500 MW coal-based power generation plant in Dahanu.
The Dahanu Taluka Environment Protection Authority (Dahanu Authority), which passed the order on Tuesday, may also consider ordering a shut down of the power plant at it next meeting scheduled on April 26.
The company has been accused of delaying the setting up this unit by environment groups and citizens in Dahanu, which is on the outskirts of Mumbai. The area is considered an ecologically fragile zone and environment groups have been arguing since 1994 that emissions from the plant affect its agriculture and horticulture.
When contacted, an REL spokesperson said the company "has received the order and is studying it". He declined to comment further.
In May 1999, REL (formerly BSES Ltd) was directed by Dahanu Authority to install an FGD plant used to neutralise sulphur oxide emissions. The Bombay High Court and the Supreme Court upheld this order. According to the environment activists, REL is seeking a review of the order through the Ministry of Environment and Forests, which has set up a review committee.
Activists of the Dahanu Taluka Environment Welfare Associations claim that setting up a committee to review a matter already decided by the High Court and Supreme Court amounts to contempt of court.
Two years after the Supreme Court order requiring REL to set up the FGD plant, the company claimed that it was unsure of the technology to be used. In April 2004, the Dahanu Authority asked REL to submit a schedule for installation of the plant. As per REL's own schedule they were supposed to finalise the bid process and issue a letter of intent of installation of the plant in February 2005.
The company has placed a letter of intent on Ducon Technologies Inc (of the US), which clearly stated that Ducon is not permitted to start work on engineering/installation till REL issues a separate notice to proceed. And work has not yet begun.
The Dahanu Authority has deemed this a delay tactic and has directed REL to furnish a bank guarantee for Rs 300 crore by April 19 in favour of the Ministry of Environment and Forests.
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