TECs to merge, ambitious plans

By Our Staff Correspondent

MUMBAI, JUNE 14. The boards of directors of Tata Power Company, Tata Hydro-Electric Company and Andhra Valley Power Company have approved the plan to merge the three companies. Accordingly, Tata Hydro-Electric and Andhra Valley will be merged with Tata Power Company and the swap ratio has been fixed at four shares of Tata Power for every five shares of Tata Hydro-Electric and four shares of Tata Power for every five shares of Andhra Valley. The merger will be effective from April 1, 2000.

According to Mr. Ratan Tata, chairman, Tata Electric Companies (TEC), the merger was facilitated by a change in the stamp duty structure. Mr. Adi Engineer, executive director, TEC, said the total stamp duty would be around Rs. 60 crores now as against a huge amount had it been done earlier.

TEC has chalked out ambitious plans in new businesses. These include foray in LNG business, and further consolidation in power and communication infrastructure. The capital investment plans amount to a total of Rs. 3,580 crores. In fuels, an investment of Rs. 554 crores is planned for the LNG terminal and jetty. In the area of communications, an investment of Rs. 375 crores is planned initially.

In the non-licence area, an investment of Rs. 1,955 crores is planned. It includes owning and operating units at Jojobera (Bihar) of 300 MW, and Wadi (Karnataka) of 75 MW. Generation will cross 2,000 million units after completion of the expansion at Jojobera and Wadi. In Belgaum, the company has initiated a foray for a 80 MW project and iin Mangalore, it has entered into a JV with China Light & Power Company of Hong Kong. TEC has agreed to take a 30 per cent equity stake in the Mangalore Power Company.

In the licence area, an investment of Rs. 1,849 crores is planned including hydro-enhancement, consumer development, system capital expenditure and repowering.

In LNG, the company has entered into a joint venture with Total to form Indigas. This joint venture is for a six million tonne per annum LNG terminal. The JV will take up import/storage, regasification and marketing of LNG to industries in an around Mumbai. It has also signed a co-operation agreement with GAIL as a JV partner. The project consists of importing LNG and using part of it for Trombay generation plant and supply the balance to GAIL pipeline for distribution. It has also received the clearance from the ministry for setting up a fuel jetty.

TEC will play a pivotal role in the group's communication business initiative. In Mumbai, its communication infrastructure accounts for 30 per cent of the national Internet traffic. Its optic fibre network, it has 1200 km right-of-way and 400 km is already wired. It is to commence operations in the next nine months. TEC also aims at becoming a dominant national broadband services provider. It is looking at nationwide expansion in the next 3-5 years and will bid for partnership with right of way owners. It also plans to enter into alliances with content and last mile partners and set up its own gateways.

The directors of Tata Power have approved plans to issue up to Rs. 300 crores of preference shares to part finance the company's capital investment plans in one or more tranches.

TEC has submitted plans to the Maharashtra Government for repowering its thermal units in Trombay. The existing 500 MW multifuel fired thermal units will be repowered by the installation of 2 X 225 MW gas turbines. This will result in a 7 per cent improvement in the efficiency of the existing plant. The capital cost of Rs. 1.9 crores per MW for this project is far lower than comparable combined cycle power plants.

The company has also embarked on a project to renovate its hydro- electric plants by replacing the existing units at the Bhivpuri and Khopoli hydro stations with 24 MW units of higher efficiency. This will result in an increase in generation by about 8 per cent and yield additional revenues of Rs. 17 crores annually. Water augmentation scheme from Kundli Dam is under implementation. This will result in additional revenues of Rs. 25 crores annually by increasing generation at Khopoli.

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