A draft of a detailed project report for the expansion of the Tornagallu power plant in the Bellary district of Karnataka has been turned down by the Indian Central Electricity Agency on the grounds that the DPR does not contain an interim financial package.

The move followed on the heels of the withdrawal of Tractebel Energy from its joint venture with the Jindal group. Jindal Tractebel Power Co was to have built the proposed expansion.

The Tornagallu plant currently has a capacity of 260 MW, half of which is earmarked for the state grid. The plan proposes to expand this to 500 MW, with all the new output to be exported to the grid. The project involved equity participation from the state-owned utility, Karnataka Power Corp, of at least 25 per cent.

The DPR has also been criticised for not including details of the engineering, procurement and construction contractor, a prerequisite for techno-economic authorisation. In addition, the CEA has said that the estimated cost of the expansion is too high.

The company will now have to re-submit the DPR when all the necessary conditions have been fulfilled. The state government is keen to see the project proceed to help meet a predicted shortfall in generating capacity of 3500-4000 MW by 2010. Meanwhile Tractebel Energy in pulling out of the scheme, sold 12 per cent of its stake to the Jindal group and the remaining 38 per cent to financial institutions for a total of $50.5 million.

Tractebel is the third foreign power company to withdraw from projects in India recently, the others being Cogentrix and PowerGen.