RIL to partner in Ib Valley power project

By Our Special Correspondent

NEW DELHI, APRIL 19. Reliance Industries today announced its intention of participating in a Orissa-based mega power project in partnership with Southern Energy Asia Pacific (formerly Consolidated Electric Power Asia Limited) based in Hong Kong. The company's participation in the project is by virtue of buying 50 per cent of Southern Energy's equity in the project. A joint agreement to develop the project with equal interest was recently signed by the two companies, according to a Reliance news release here today.

The Union Ministry of Power and Power Trading Corporation are reviewing the power purchase agreement and the payment security structure. Tariff approval from the Central Electricity Authority is awaited. The Central Government has included the project under the mega power policy which gives it the benefit of importing equipment without paying customs duty.

Southern Energy had signed a memorandum of understanding in September 1994 with Power Grid Corporation to develop the project based in Herma near Ib Valley in Orissa. The 3,960 MW coal based power project is said to be one of the largest independent power projects ever undertaken. Mines owned by Coal India Limited (CIL) in Ib Valley will be tapped to provide more than 19 million tonnes of fuel every year. Mahanadi Coalfields, a subsidiary of CIL, has allocated two dedicated coal blocks about 40 km from the project site. State-of-the-art power generators will deliver electricity to the east, north and west along with a power grid involving 3,300 km of transmission lines. The dedicated transmission system will be developed and operated by the public sector Power Grid Corporation

Once completed, electricity will be sold to Power Trading Corporation which in turn will sell it to areas of greatest need such as Madhya Pradesh and Gujarat in the West and Rajasthan, Punjab and Haryana in the North.

According to the project schedule, the first of the planned six units will begin commercial operations three years from achieving financial closure. The remaining five units will begin operations at intervals of three months with the entire plant expected to be functional within 51 months of financial closure.

Send this article to Friends by E-Mail

Section  : Business
Previous : Bullion rates
Next     : Creeping acquisition along with buy-back: Ambani