Raipur: The National Thermal Power Corporation's (NTPC) first 500 MW coal-fired unit of the controversy-marred 2,980 MW plant at Sipat in Chhattisgarh has started functioning following the restoration of water supply by the state government.

"We began synchronization of the first 500 MW unit May 6 and the second unit of another 500 MW will also be synchronized either late this month or by early June," an NTPC official said Wednesday.

The unit in Bilaspur district was shutdown in mid-March after a brief trial run due to the suspension of water supply after a row between the state government and the NTPC management regarding employment of people who were evicted from their land for the setting up of the plant and the state's share of power.

Government sources said water supply was restored after Union Minister of State for Power Jairam Ramesh held discussions with Chhattisgarh Chief Minister Raman Singh here April 20 and agreed to provide jobs to about 500 Sipat project oustees after technical training.

NTPC's 4,300 acre thermal power plant in Sipat, about 140 km from here, with three units of 660 MW each and two units of 500 MW each, will be the country's first project to operate on super-critical boilers that burn less fuel to produce the same amount of electricity as conventional boilers.

Once commissioned fully, the Sipat project is expected to end the power crisis in several states, particularly Maharashtra, Madhya Pradesh and Gujarat.

The NTPC official said the Chhattisgarh government has begun supplying 120 million cusecs of water from its Hasdev Bango canal. This will continue for three years and in return the company would pay Rs.720 million annually to Chhattisgarh as water tax.

In the meantime, the Central Water Commission will do a survey and submit the feasibility report for construction of an anicut on river Mahanadi, about 50 km from Sipat, to help the NTPC find a permanent solution to its water problems.