A Memorandum of Understanding was signed between the Karnataka government and Chhattisgarh with the aim to set up 1,200 MW thermal power project here, which will supplement generating capacity at lower costs.

The energy Department officials of Karnataka reported, “The pit-head station - two 600 MW units - is proposed to be established in Godhna in Janjgir district and is expected to be completed by October 2012.”

The senior officials of the Chhattisgarh State Electricity Department and state-owned Karnataka Power Corporation Limited (KPCL) inked the pact. This plant will require an initial investment of Rs 6,000 crore, which will be invested by the Chhattisgarh State Electricity Department and KPCL.

The Mou, which is being considered as an advanced step towards inter-state cooperation, was signed in the presence of Karnataka Chief Minister B S Yeddyurappa, who flew in from Bangalore for the ceremony and Chhattisgarh Chief Minister Raman Singh.

The cost of per unit power generated by this new plant would be Rs.2.44 as compared to Rs.3.90 generated by a similar plant placed in Karnataka.
“It is not economical to locate thermal power stations in Karnataka, which does not have coal or oil unlike Chhattisgarh and some other states,” stated Yeddyurappa.

He further added that the cost of transporting coals from these states to Karnataka.
He reported, “If we produce power near the pit-head, the cost of power will come down by 30 per cent to 40 per cent.”