In a groundbreaking move, Chief Minister Bhagwant Mann announced on Monday that the Punjab government has successfully acquired the 540 MW Goindwal thermal plant from the GVK Group for a sum of ₹1,080 crore. The thermal plant, situated in Goindwal Sahib, Tarn Taran district, spans over 1,100 acres.
Speaking at a press conference, Mann highlighted the historic nature of the acquisition, emphasizing that it signifies a reversal of the trend where state governments traditionally sold their assets at nominal prices. The purchase, executed by the Punjab State Power Corporation Limited (PSPCL), marks the first instance of a government acquiring a private power plant.
Mann asserted that this acquisition stands out as the most cost-effective among state or private entities, comparing it favorably to other power plant purchases such as Korba West, Jhabua Power, and Lanco Amarkantak, each with an installed capacity of 600 MW, bought at ₹1804 crore, ₹1910 crore, and ₹1818 crore, respectively.
The Chief Minister disclosed that the acquisition cost of the 540 MW plant equates to ₹2 crore per megawatt (MW) and announced its new name, Sri Guru Amardas Thermal Power Plant, in honor of the third Sikh Guru.
Addressing the plant’s underutilization, Mann revealed that it operated at only 34% of its capacity against the available 61%. He expressed plans to ramp up operations to 75-80% capacity, significantly boosting power generation in the state.
Anticipating positive outcomes, Mann estimated that the purchase would lead to a reduction in the overall tariff by over ₹1 per unit, resulting in savings of ₹300-350 crore on power purchases. Additionally, he highlighted the potential to double power generation due to increased coal availability from the state’s Pachwara coal mine.
Mann clarified that coal from Pachwara could only be used for government power plants, making this acquisition crucial for optimal coal utilization. The move also terminated one out of three Power Purchase Agreements (PPA) with private thermals.
The 540 MW GVK Goindwal Sahib Thermal plant, conceived in 1992, saw various agreements over the years, with the latest amendment to the PPA in 2009. PSPCL competed against 11 other contenders for the purchase, including Jindal Power, Adani Power, Vedanta Group, and others.
This acquisition not only marks a strategic investment for Punjab but also sets a precedent for government ownership in the power sector, breaking away from traditional asset disposition practices.