When Principles Pay: Tata Power Plant Mundra

15 Pages Posted: 4 Aug 2012 Last revised: 28 Aug 2012

See all articles by Amit Gupta

Amit Gupta

Management Development Institute; Indian Institute of Management (IIMB), Bangalore; Indian Institute of Management Amritsar; Indian Institute of Management Amritsar

Vasanthi Srinivasan

Indian Institute of Management (IIMB), Bangalore

Date Written: December 30, 2011

Abstract

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

Suggested Citation

Gupta, Amit and Srinivasan, Vasanthi, When Principles Pay: Tata Power Plant Mundra (December 30, 2011). IIM Bangalore Research Paper No. 346. Available at SSRN: https://ssrn.com/abstract=2123035 or http://dx.doi.org/10.2139/ssrn.2123035

Amit Gupta (Contact Author)

Management Development Institute

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Indian Institute of Management (IIMB), Bangalore ( email )

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Indian Institute of Management Amritsar ( email )

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Indian Institute of Management Amritsar ( email )

Inside Government Polytechnic Campus
Polytechnic Road PO: Chheharta, G.T. Road
Amritsar, 143105
India

Vasanthi Srinivasan

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

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