New Delhi, Feb. 11: Union power ministry is understood to have decided to go ahead with its 1980MW project covering Chatra and Hazaribagh districts, overriding coal ministry objections but has agreed to cut down land use for the proposed plant in North Karanpura.

Setting aside objections of the coal ministry, which wanted the project shifted out of the coal-rich area, the power ministry has now moved a draft cabinet note indicating its resolve to go ahead with the project at the original site of North Karanpura, 65km from the district headquarters.

"The power ministry has moved a draft CCI (cabinet committee on infrastructure) note seeking to give directions to the coal ministry for reviving fuel linkages to NTPC's (National Thermal Power Corporation) proposed 1980 MW power plant," said a power ministry official.

'The note cites a go-ahead by a group of ministers' (GoM) panel for the power plant at the same site after downsizing it," he added.

According to sources, a final draft on the project could now be brought before the Union cabinet for approval as early as on Wednesday.

The power ministry's move follows a group of ministers' decision last year to cut down the size of the plant even as the coal ministry insisted that it be relocated.

Work on the project, first envisaged in 1998 during the NDA's tenure at the Centre, began in 2003. But it was stalled in mid-2009 as the 1,500 acres it was coming up on was identified as a coal block with reserves to the tune of 6 billion tonnes. After this, Coal India Limited (CIL) and NTPC got tangled in a turf war.

While CIL contended that the plant would "sterilise" 6 billion tonnes of coal which could be used to produce over 50,000 MW of electricity, NTPC argued that it could not pull out of North Karanpura after investing close to Rs 250 crore.

"Both ministries have been at loggerheads over the issue for over a decade. In December last year, the coal ministry circulated a note for shifting the site to Kanhachati village in Chatra district and had sought the views of various ministries to be placed before CCI," explained a source.

The GoM had earlier constituted a panel, headed by planning commission member B.K. Chaturvedi, to look into the controversy. It suggested two options ' relocating the plant or reducing its size.

"The GoM chose the latter," the source said, adding that NTPC agreed to cut down land use for the project by about 40 per cent.

During the winter session of Parliament, Jyotiradatiya Scindia, minister of state (independent charge) in the power ministry, had also made it clear that the Centre had decided to go ahead with the project at North Karanpura.