Date:27/02/2005 URL: http://www.thehindubusinessline.com/2005/02/27/stories/2005022701690200.htm

Back Energy majors in fray for captive power projects

Our Bureau

Mumbai , Feb. 26

RELIANCE Energy, Tata Power, Larsen and Toubro and Wartsila Ltd are in fray for the Rs 300-crore, 100-MW gas-based captive power plant to be set up at Thane. The plan is to bring gas through the proposed Dahej-Uran pipeline being put up by GAIL (India) Ltd.

This is one of the two captive power plants that will be set up under the aegis of the Maharashtra Industrial Development Corporation (MIDC), which is expected to commence production by mid-2006.

The second 100-MW plant, a coal-based one with an estimated cost of Rs 400 crore, is to be located at Nagpur. Those in the fray for this project are Reliance Energy, Tata Power, Larsen and Toubro.

The two projects, with an aggregate cost outlay of Rs 700 crore, are part of MIDC's initiative to tide over frequent power cuts by the Maharashtra State Electricity Board (MSEB) in industrial areas.

The last date for submission of bids is March 30 and the bid is to be awarded by April 15.

The plants will use the existing MSEB lines for transmission and distribution of power and MIDC will provide 125 acres of land on 95-year lease for the two projects.

"The genesis of group captive power plant concept came from the need for stable power by the industrial units in the State. Frequent power cuts have been affecting production at the MIDC estates and we decided to come up with the captive power plants. We started work on the project in March 2004,'' Mr Satish Gavai, CEO, MIDC, said.

Both the Trans-Thane Creek Area project and the Butibori project at Nagpur will see 26 per cent equity being held by industries in the region while the power companies will take the remaining portion. These companies will have the option to raise additional funds from the open market. In the Thane project, as many as 960 industrial units, of which 517 are high-tension consumers have expressed interest. In Butibori, almost all the 1,036 units have shown interest.

Currently, MSEB sells power at Rs 3.75 to Rs 4 per unit to the industrial units; this means the power companies would have to sell power at lower rates. The expectation at MIDC is that the industrial units at these two locations may get power at the rate of around Rs 3.50 per unit.

Currently, the Thane MIDC consumes 118 MW and this is likely to go up to 175 MW over the next five years. The consumption at Butibori is about 40 MW.

MIDC is also mulling the feasibility of setting up similar plants in Kagal in Kolhapur district, Ranjangao in Pune district and Tarapur, Airole and Badlapur in Thane district. But, all that will depend on the success of the Thane and Nagpur projects.