Pointing out that the previous DMK regime did not take any step to implement the project, the Chief Minister said that the project would be implemented by the TNEB with funds from the Tamil Nadu government. The state government would bear the entire cost of 8000 crore rupees, Ms. Jayalalithaa added.

In a statement released today, Ms. Jayalalithaa said that the government led by her, was taking all constructive steps to eliminate power cuts which have been plaguing the state for the past 5 years and to make Tamil Nadu a power surplus state.

Ms Jayalalithaa pointed out that a Memorandum of Understanding was signed between the Bharat Heavy Electricals Ltd and the Tamil Nadu Electricity Board in October 2007, for setting up a 1600 Mega Watts Super Critical Thermal Power Project at Udangudi in Tuticorin District. Following this, a joint venture company called the, Udangudi Power Corporation Limited was set up on the 26th of December 2008. The cost for the implementation of the project was estimated to be 8000 crore rupees. This was inclusive of loan and share capital. Of the share capital, it was decided that the TNEB and BHEL would give 26 percent each, and the remaining 48 percent share capital would be given by any private company which came forward to implement the project. It was also decided that the loan for the project should be acquired from a financial institution.

A decision on the private company which could implement the project was not taken till the minority DMK government quit office. Also, of the 8000 crore rupees, the percentage of the share capital and the percentage of loan was also not decided, the Chief Minister noted.

Ms. Jayalalithaa further said that apart from the allotment of 32.5 crore rupees each by BHEL and TNEB for the project, no step was taken towards the implementation of the project. For a project of this nature, a No Objection Certificate should be obtained from the Union Environmental Ministry for the project. Long Term Coal Linkage should be made to get the no objection certificate. As the Long Term Coal Linkage was not made, the no objection certificate from the Union Environmental Ministry could not be obtained. Ms Jayalalithaa further stated that the lack of cooperation from BHEL was also one of the reasons for the non- implementation of the project.  For all these reasons, the Udankudi Thermal Power Project had not been implemented.

The Chief Minister noted that she had yesterday reviewed the reasons for the non implementation of the project with government officials and with the officials of the TNEB. It was known to her after the review that the implementation of the scheme by the Udangudi Power Corporation Limited was impossible.

The Chief Minister said that it was because of these reasons that she had decided to implement the project as a state government project, through the TNEB with financial assistance from the Tamil Nadu government. The Tamil Nadu government would give 8000 crore rupees which was the total cost towards the implementation of the project as a share capital to the TNEB, she said.

Further, as the Union Coal Ministry had not issued any orders allotting coal for the project, it had been decided to import coal from abroad, the Chief Minister noted. The Union Environmental Ministry would be informed about the purchase of coal from foreign countries and based on that steps would be taken to obtain the no objection certificate. The Chief Minister said that through these steps, the means to implement the project which, was in the cold storage for the past 4 years, had been made.
As the Udangudi Thermal Power Project was to be implemented by the Tamil Nadu Electricity Board, it would get the Mega Power Status certificate. Based on this status, tax exemption would be obtained and there were possibilities of  reducing the project costs. Further the 1600 Megawatts of power, to be generated through this project could be entirely  consumed by Tamil Nadu, the Chief Minister added.