When Principles Pay: Tata Power Plant Mundra
15 Pages Posted: 4 Aug 2012 Last revised: 28 Aug 2012
Date Written: December 30, 2011
The Tata Power – Mundra case describes the issues and challenges facing the company in adopting a sustainability strategy for one of their Greenfield power project site. The case throws light on the company’s modus operandi in integrating sustainability issues right from the project’s bidding stage till its successful implementation. Tata Power had incorporated the technical and commercial feasibility elements into the project to meet all the requirements laid down under the Principles of Community Engagement as prescribed by the Group, yet each Greenfield site customizes its approach to the project rather than adopting a standard “one solution fits all” approach.
In the case of the Mundra project, the major issues that were encountered in the land acquisition process was the loss of grazing land for local communities, which was addressed by establishing a charitable trust for fodder supply. This was preferred to providing land given its unsuitability in supporting grazing. The setting up of a bio gas plant and other community institutions as part of building the ecosystem is of particular relevance. Some of these interventions were not planned, but emerged based on the local contextual factors. The unintended outcomes of this intervention were the substantial increases in the supply of milk and the selling price of milk thus enabling the greater community’s acceptance of the Group’s CSR initiatives. This holistic approach towards public private partnership, in establishing the Trust by fund raising and government support, is an example of a model that could be relevant for countries in transition and emerging economies.
This case attempts to describe in detail the implementation strategy of Tata Power in its Mundra project. The case also demonstrates the need for companies to engage responsibly with communities in particular when infrastructure requires acquisition of large land holdings.
Keywords: Tata power, UMPP, Greenfield project, CSR, International funding
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