How a nondescript place created history in power sector

There were differences over who should execute the project — Centre or the State

Updated - February 25, 2022 09:40 am IST

Published - February 24, 2022 04:47 pm IST

Prime Minister Jawaharlal Nehru takes a view of earth-moving operations on May 20, 1957.

Prime Minister Jawaharlal Nehru takes a view of earth-moving operations on May 20, 1957.

The recent adoption of rehabilitation and resettlement policy by the NLC India Limited (NLCIL), formerly Neyveli Lignite Corporation, adds one more feather to the cap of the 65-year-old Navratna public sector enterprise. Union Minister for Coal and Mines Prahlad Joshi, while lauding the Tamil Nadu government and the power utility at the time of the launch of the document in mid-January, termed the policy “very flexible” with multiple options available to the affected people. But what may be of more interest than the document is the fact that the headquarters of the institution, Neyveli — once regarded as a nondescript agrarian place in Cuddalore district — is a home to the first lignite-fired power plant in south Asia.

Even though the plant (Neyveli Thermal Station-I) is no longer in use, it met the electricity needs of Tamil Nadu for 58 years — from 1962 to 2020. More importantly, Thermal Station-I was meant exclusively for Tamil Nadu where all other stations set up by the NLC in Neyveli since 1985 are being utilised for south India as a whole.

The Thermal Station-I came into being, not without struggle on the part of the then political and administrative leadership of the State. As soon as deposits of lignite were confirmed in Neyveli in the late 1940s and the subsequent exploration revealed their extent, policy-makers, in the formative phase of the country after Independence, started toying with the idea of developing a lignite mine there. Not just that. The proposed project had to have another component — electricity generation. This was where the problem started, when the implementation of the project was included at the time of the formulation of the Second Five Year Plan (April 1956-March 1961).

Despite the Congress remaining in power in the State and at the Centre, there were differences over who should execute the project — the Central government or the State. Those who were at the now-defunct Union Planning Commission regarded power production as one of the functions of the States despite the subject ‘Electricity’ figuring in the Concurrent List of the Constitution. But the Tamil Nadu government, particularly C. Subramaniam, felt that if the State government decided to execute it, it would have to shell out most of its resources for the project alone.

There was one more reason for the State’s stand. Mining had always been done by the Union government. So the Centre should take over the project.

The differences were out in the open when Subramaniam, as the Finance Minister, attended a meeting with the Planning Commission’s representatives in New Delhi, including C.M. Trivedi, the Member who dealt with the subject and former officer of the Indian Civil Service. Subramaniam, in his memoirs, Hand of Destiny -Volume I, narrated that as the Commission did not agree with his position, he decided to make “a strong protest” against its attitude. He walked out of the meeting, creating a sensation. Prime Minister Jawaharlal Nehru came to know of the development and he had discussed the matter with Subramaniam. Thanks to the intervention of Union Ministers Gulzarilal Nanda and T.T. Krishnamachari, the Centre decided to treat the Neyveli project as its own.

In May 1957, Nehru inaugurated the project in the presence of Kamaraj and Subramaniam. Though the project was billed as a symbol of India-Russia [the then Soviet Union] cooperation, India took the assistance of other countries, including the United States.

In August 1962, the first unit of 50 MW was formally commissioned by President S. Radhakrishnan. In three years, five more units of 50 MW each were added. By February 1970, another three units of 100 MW each went on stream. The station had generated a total of 1,85,390 million units (MUs) over about 32.66 lakh hours. The entire cost of the Thermal Station-I was around ₹80 crore.

As on date, Neyveli has thermal power units of 3,640 MW. In addition, the NLCIL, which has also taken up joint venture projects, is responsible for the establishment of coal-fired units of 1,000 MW (in Thoothukudi district); solar units of 1,319 MW (including those in Tamil Nadu and 20 MW in the Andaman and Nicobar Islands) and a wind unit of 51 MW (in Tirunelveli).

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