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NTPC
Sipat project on schedule
R.D.
Gupta, Executive Director, and S. Trivedi, General Manager of NTPC Sipat,
addressed a press conference recently at Bilaspur. Gupta informed that the
Sipat project shall be completed in the Xth plan period. For the first
time in India, single largest units of 3 X 660 MV with super critical
boilers and 765 KV transmission facilities are being planned for
implementation at Sipat. The super critical parameters result in 2.5 per
cent improvement in thermal efficiency and 2.5 reduction in emission of
greenhouse gases.
He
further informed that the ownership of 2750 acres of Government and
private land falling under seven villages has been received by Sipat
project.
The
company will soon undertake to build Bilaspur-Matiyri Rd, Janji-Kaudia
diversion Rd, a 16 Km long boundary wall, residential quarters etc.
besides planting 91,000 fruit bearing, medicinal and other trees, and
making a 100 meter width green belt.
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NHPC
plans 5 projects in West Bengal
National
Hydroelectric Power Corporation will build five power projects in West
Bengal generating more than 450MW power, as part of its long-term plan to
achieve 30,000MW capacity in the next 12 years.
"We
will be building these projects in West Bengal on an ownership basis and
we have already got the consent of the State Government," NHPC
Chairman Yogendra Prasad said.
All
these are green-field projects and the projects include Teesta low dam
Stage I of 40MW, Stage-II of 60MW, Stage-III of 100MW, Stage-IV of 132MW
and Farakka barrage on Ganga river of 125 MW according to Mr. Prasad.
About a month back, the corporation had also signed an agreement with the
Government of Sikkim for the execution of 510MW Teesta Stage V project in
the state, with an estimated cost of about Rs.2,198 crores. He said the
West Bengal Government would be getting 12 per cent free power from these
units.
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Tannirbhavi
power plant to be operational by December
The
220-MW naphtha-based Tannirbhavi barge-mounted power plant would be
operational by December or January, according to the Karnataka Chief
Minister, Mr. S.M. Krishna.
Mr. Krishna, who was in Mangalore to undertake a survey of the
developmental work in the Dakshina Kannada district, also said work on the
Kasargod-Mangalore-Hassan-Bangalore LNG pipeline would also commence in
December. An agreement to this effect has been reached between the Gas
Authority of India Ltd., the Petroleum Ministry and the Karnataka
Government, he said.
According to Mr. Krishna, LNG, which he described as the ‘fuel of the
future’, would be available in Mangalore by 2003-2004 which could be
used for power generation.
However, Mr. Krishna also said the ambiguity regarding the setting up of
power plants in Dakshina Kannada would persist for some time. ‘The ball
is now in the court of the power companies. It is for them to come forward
with draft power purchase agreements which are acceptable to the Karnataka
Power Transmission Corporation Ltd.’, he said.
Dwelling briefly on various issues ranging from the ‘internationlisation’
of the Mangalore airport to the lack of rooms for primary schools and the
absence of doctors in hospitals, the Chief Minister described Mangalore as
a ‘sustainable link’ for the ‘IT and bio-tech industries’ and put
forth the State Government’s intention to develop Mangalore as an ‘IT
hub’.
When it was brought to his notice that companies such as MRPL, HPCL and
BASF between them owed the Mangalore Urban Development Authority a sum of
Rs.27 crore in various taxes, he said many poor people had made sacrifices
for the setting up of these companies and have lost their land and sources
of livelihood. ‘If they have not been paying their taxes, we will summon
them. They are all doing well. I have seen their balance sheets,’ Mr.
Krishna said.
Later, addressing the valedictory session of the 79th general
council meeting of the Indian National Trade Union Congress (INTUC), Mr.
Krishna said the first few years of the new millennium had seen the ‘marginalisation’
of the trade union movement. Recalling the beginning of his political
career with the erstwhile Praja Socialist Party, he said it was time to
reassess the role of trade unions in the era of liberalisation.
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Coal
pricing for Bhadrawati project finalised
The promoters of the 1070MW fast track Bhadrawati power project, the Ispat
Group, will be approaching EDF, France, to reconsider their pull-out from
the project, according to top Government officials.
This follows the Coal Ministry, Maharashtra State
Electricity Board (MSEB) and the promoters agreeing upon a coal price of
around rs.1,600 per ton in a meeting held on Thursday.
Earlier, EDF had cited the delays in the finalisation in
the coal pricing as a reason behind their pull-out.
Under the coal supply contract between the Western
Coalfields Ltd. (WCL) and MSEB, the liquidated damages attracted by the
coal producer for not meeting contractual supply obligations was lesser
than in the case of the Hinduja-promoted 1040MW Vizag power project.
Consequently, the premium was lower than the five per cent charged in the
Vizag project, official said.
WCL has finalised the mining blocks which will be supplying
the 4.8 million tons per annum required to fire the power plant. On their
part, MSEB officials reiterated their commitment to award escrow cover for
the project, according to Power Ministry officials. The escrow-based
payment security mechanism is an essential prerequisite for the Center to
award counter-guarantee cover for the project.
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Bhadravati
project: Last hurdle cleared finally
A long pending hitch on the delay-plagued start of the 1,080 MW Bhadravati
thermal power project in Maharashtra’s Chandrapur district was removed
on Thursday, with an inter-government agreement on the price of coal to be
supplied for the project. One of the eight original ‘fast-track’
projects of the Union power ministry, involving billions of dollars
investment, is promoted by the Mumbai-based Ispat group, with
participation by GEC Alsthom and Electricite de France.
The power generated is to be sold to Maharashtra State
Electricity Board. A 20-year power purchase agreement has been signed and
escrow cover given for the project. However, the project has been delayed
by tussles on one clearance after the other. Coal input was a major
factor; after a long tussle on where it was to be sourced, came a hitch on
the price of supply. Thursday’s meeting was chaired by Union power
secretary Ashok Basu, the heads of Coal India Ltd. and the MSEB were
present. "It took much discussion, but we finally settled the matter.
Financial closure for the project is now possible", Mr. Basu said. It
was earlier expected that it would take six months after this hitch had
been cleared for the promoters of the project to reach ‘financial
closure’, the term for tying the last details of financing.
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Jindal Vijaynagar advances
commissioning of pellet plant
Jindal Vijaynagar Steel (JVSL) has advanced the
commissioning of its pellet plant by two months. Scheduled for starting in
December, this plant will now be opened in October. The operation of the
second phase of its Corex steel plant would now be done in February ’01
as against it’s the earlier schedule of commissioning in December, ‘00
According to a senior JVSL official, this has been done as
the company has decided to go ahead with its pellet plant first, following
the completion of the disbursement process from institutions.
JVSL needed Rs.40 crore to complete the pellet project,
which has now been disbursed by IDBI. It needs another Rs.50 crore for the
second phase of Corex.
The Rs.6,144 crore, 1.6 million ton (mt) JVSL project
comprises two phases of the Corex and the Rs.429 crore pellet unit.
Pellets from the 3.3 million ton pellet project will be used in the steel
making process for hot rolled coils (HRC).
The company has its own mining company. Vijaynagar
Minerals, to generate fines needed for the pellet unit. However, since the
unit is currently awaiting clearance from the Ministry of environment
& forests. JVSL has signed an agreement with private firms for the
supply of about 2 million tons of fines.
JVSL is also slated to receive another tranche of Rs.90
crore from ICICI, from the total Rs.200 crore it has already sanctioned.
It had disbursed Rs.110 crore in June’00. The company recorded a net
profit of Rs.25.4 crore for the quarter ended June’00.
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UTI
asks GSFC to pull out of state IT park project
India’s
second largest DAP producer, Gujarat State Fertilisers and Chemicals
Limited (GSFC), has been advised by UTI, a majority stake holder among the
institutional investors in GSFC, to stay away from the capital intensive
information technology park project near Baroda, promoted by Gujarat
government.
GSFC, which is passing through a
difficult phase, has started looking for an alternative cost effective
strategy. GSFC is considering the launch of its own portal, which will
market the services of fertilisers and chemical experts working for GSFC.
L&T had quit the project almost
nine months ago and now financial constraints have compelled GSFC to
consider different options. L&T had expressed its interest in the IT
joint venture with the Gujarat government through the state-owned public
sector unit GSFC. However, later on L&T decided to quit the project
and Gujarat government turned to non-resident Gujaratis from US. Sources
in UTI told ET that the UTI, which is the largest stake-holder among the
institutional investors, advised GSFC not to consider the capital
intensive IT project. GSFC has already incurred losses during the last two
quarters, and may not be able to come out of red for the next one or two
quarters as delay in capitalising its new ammonia project has already
mounted the financial burden of the company.
Considering the financial situation of
the company, UTI has suggested that GSFC can use its core competence in
fertilisers and chemicals and market it using the internet. GSFC
management has agreed to UTI’s suggestion and has started looking at the
possibility of launching its own portal.
When asked by ET, GSFC MD Mr. P K Das,
confirmed that the management is looking at the possibilities of launching
its own portal site, which will offer fertilisers and chemicals related
services to industrial and individual customers using the large pool of
GSFC’s experts.
However, Mr. Das said that the company
is committed to the IT project. The only difference is that under the
given circumstances GSFC may not prefer to block a large sum of capital in
capital intensive projects like IT park. The portal will help GSFC in
offering services to the industry on one hand and to use its human
resources more efficiently.
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TN to
reallocate Videocon escrow to four projects
The Tamil Nadu Electricity
Board (TNEB) has decided to-allocate the escrow capacity it will get by canceling
the 1050 MW Videocon power project’s escrow to four projects.
These are the 500 MW lignite based Jayamkondam
project of the Reliance consortium, the 103.5 MW project of Aban Lloyd,
the 53 MW project of DLF Power, and the balance for the Ennore LNG
project. The TNEB has agreed to buy 750 MW from the Ennore LNG project,
for which a part of the escrow will come from the TNEB’s capacity and
the balance through a payment support mechanism from the State Government.
The TNEB, which took a decision to this effect at
a meeting of its members earlier this month, has sought legal opinion
before it will formally communicate its decision to cancel the Videocon
project’s escrow.
The TNEB feels that the tariffs for these two
projects can be brought down substantially as the first year tariff for a
natural gas based project in Andhra Pradesh is only Rs.1.79 per unit,
while that for TNEB’s own Kovilkalappal project comes to about Rs.2 per
unit.
The TNEB based its decision to cancel the escrow
for the coal-based Videocon project at North Chennai on the delay in
achieving financial closure, while the re-allocation of escrow is being
done based on a CRISIL study, commissioned by it, of the comparative
tariffs of independent power projects in the State.
Videocon Power Ltd. signed an escrow agreement in
December 1999 with a condition that it achieves financial closure within
six months. Videocon was given a one month extension of the deadline as
its firm financing package had to be approved by the TNEB.
The TNEB also felt that the levelised tariff of
Videocon was on the higher side and the board would have to pay over
Rs.1000 crores per annum to Videocon as tariff, which was much higher than
some other projects.
Of the 18 IPPS, whose levelised tariffs were
analysed and ranked by Crisil, the 106 MW Samayanallur project was ranked
13th (domestic inflation of 5.5 percent and rupee depreciation
of three percent), the 106 MW Samalpatti project 15th, the 330
MW Pillai Perumalnallur project 17th and the 250 MW ST-CMS
project 18th. These projects have got escrow cover and
construction is apace. The 200 MW GMR Vasavi project, which has started
generation, is ranked 8th.
The levelised tariff (assuming inflation of 5.5
per cent and rupee depreciation of 3 percent) for Aban Loyd’s project is
Rs.2.71 per unit, Ennore LNG (excluding port charges) Rs.2.76 per unit,
DLF Power Rs.2.97 per unit, Jayamkondam Rs.3.22 per unit and Videocon
Power Rs.4.07 per unit. The financial commitment by the TNEB to these
projects will be Aban Loyd Rs.1.995 crores per MW per year, Ennore LNG
Rs.2.027 crores, DLF Power Rs.2.184 crores, Jayamkondam Rs.2.368 crores
and Videocon Rs.2.991 crores.
The TNEB’s decision to re-allocate the escrow
capacity based on tariff has come as a rude shock to a number of other
IPPs who were hopeful of getting escrow cover as and when it became
available. The TNEB is using the Supreme Court judgement on the Madhya
Pradesh escrow case as the basis for re-allocating the escrow.
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Bidadi power
project ‘viability under a cloud’
The viability for the 200-MW
Bidadi power project, jointly promoted by the US gas major, Unocal, and
the State-owned generating company, Karnataka Power Corporation Ltd., has
come under a cloud.
Sources said that with international oil prices
over $32 per barrel or about $240 a tone (7.5 barrels to a tonne), and the
rupee depreciating to about Rs.46, the project was no longer viable. At
this price and exchange rates, the effective power tariff is likely to be
over Rs.5 a unit.
As these components are treated as pass-through
items in tariff, it could have an impact on the power price. It could be
more than double the existing weighted average tariff of about Rs.1.90 per
unit, currently being paid by the State-owned transmission company.
The Bidadi project was proposed as a
naphtha-fired project, with the option to switch to liquefied natural gas
(LNG) as and when it becomes available. It has already tied up with Bharat
Petroleum Corporation Ltd., for supply of naphtha.
Estimated to cost about Rs.770 crores, Unocal is
supposed to have 25 percent equity stake and another 26 percent was to be
taken by the Karnataka Power Corporation. Equity was to comprise about 30
percent of the project finance and debt the remaining 70 percent
component.
The viability of this project has come into
question with an independent power producer, Jindal Tractebel Power
Company, agreeing to supply 130 MW at 75 percent load factor at a first
year tariff of Rs.2.60 unit.
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Financial closure of Tirupur
project delayed
The financial closure of the
prestigious multi-core Tirupur water supply project in Tamil Nadu which
was expected to be completed by October last year has been delayed because
of stringent lending terms imposed by financial institutions. This is
expected to be completed now by end of September this year.
This is the first public-private partnership
project in water and sanitation sector in South Asia to be implemented on
a BOOT (build, own operate and transfer) basis. The Tamil Nadu government
has set up NTADCL as the special purpose vehicle to oversee the
implementation of the project, which envisages supply of 185 million
litres of water per day to industrial users of Tirupur town and sewerage
collection and disposal.
Original capital cost of the project was
estimated at Rs.1250 crore but the engineering, procurement and
construction (EPC) contractors consortium of Mahindra & Mahindra,
Bechtel Enterprises and United Utilities have been persuaded by NTADCL to
bring down costs sharply to about Rs.1050 crore.
The project has equity component of Rs. 355 crore
and debt of Rs.615 crore. NTADCL is in the advanced stage negotiations
with a Singapore-based fund for equity participation of the project. Also
IL&FS has chipped in Rs.50 crore as equity, government of Tamil Nadu
Rs.55 crore, consortium Rs.4 crore, AIG of Hong Kong Rs.45 crore and LIC
& GIC Rs 35 crore, adding upto a total of Rs.230 crore.
The balance is to be raised with equity
participation by other funds and if necessary a public issue by NTADCL.
Debt component of Rs.61 crore is met by Rs.120 crore from IDBI, SIDBI
RS.80 CRORE, IL&FS Rs.230 crore, State Bank of India Rs.50 crore, LIC
Rs.40 crore, HUDCO Rs.15 crore.
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Bajaj
Electricals to set up plant for manufacture of highmast and related
products at Ranjangaon
Bajaj Electrical is setting up
a factory for manufacturing highmast and related products at Ranjangaon,
Maharashtra at a cost of Rs.45 crores, and this will be commissioned by
October ’00.
Madras
Cem 1-mtpa unit plan finalised
MADRAS CEMENTS, the flagship
of the Chennai-based Ramco group, has finalised its plan on setting up a
second one million tonne cement unit Alathiyur, Tamil Nadu, to take
advantage of rising demand and stronger price realisation in the southern
markets taking the company’s total cement capacity to 4.5 million tonne.
The company has worked out a project cost of
around Rs.300 crores, of which ICICI has given approval for Rs.150 crore
of debt, while Bank of India will provide another Rs.50 crore. The
institution will subscribe to a debenture issue of 8-year maturity with a
coupon of 11.5 per cent.
The balance amount will be financed through
internal accruals, the company has told ananlysts. The new unit will be
commissioned around March, 2000.
The company has slag grinding unit with a
capacity of 1.6 million tonne in Jayanthipuram, Andhra Pradesh, while the
other plant in Tamil Nadu has a 0.8 million tonne capacity. The company
has been facing strong competition in the region from rivals Indian Cement
and L & T.
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Centre
yet to clear 4 Fertiliser Projects
The Union cabinet is yet to clear the four
gas-based fertilizer plants that had been proposed by the Ministry of
Chemicals and Fertilizers to meet the country’s immediate needs. Suresh
Prabhu, Minister for Chemicals & Fertilizers, said the four plants are
to come up in Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh, at
an estimated cost of Rs.8000 crores.
The proposal was cleared last year by the Cabinet
Committee on economic affairs, and is exempt from the government’s
decision to freeze new capacity creation upto 2002, when it will get a
detailed report on demand-supply.
The projects, to be funded through public
investments, will come up in Thal in Maharashtra, Hajira in Gujarat,
Gorakhpur in Uttar Pradesh and Nelore in Andhra Pradesh.
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Work
on Infocity in Gujarat to begin from September
After several hiccups, the work on the 200-acre
Infocity in Gujarat is set to begin from September.
In a press release, Creative IT Inc of USA, the
company which won a global tender floated by the government of Gujarat
through Price-Water House Coopers, stated that the ground breaking
ceremony to start the first building of the project would be held in
September.
InfoCity will house office space, a residential
area, hotels, a clubhouse, a shopping mall and more amenities.
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Mysore Bank
made escrow agent for Tanir Bavi Power Project
State Bank of Mysore (SBM) has been appointed the
escrow agent for Tanir Bavi Power Project which is expected to achieve
financial closure two weeks from now. The project is expected to start
producing power from April 2001.
In a landmark judgment in April this year, the
Karnataka High Court on a writ petition filed by the promoters of the
Rs.880 crores Tanir Bavi Power Project over turned a state government
ruling not to award escrow cover to the project.
In another development, the promoters of the
project have signed an MoU with BPCL for supply of LNG fuel. The promoters
are looking at LNG as an alternative fuel as it would considerably reduce
the fuel cost thereby bringing down the tariff cost.
State government officials told Business Standard
that the 220 MW barge-mounted project has been allotted revenue circles
and the escrow was expected to be operationalised soon. As per an
agreement, 1.25 times the billing should be the revenue equivalent
allotted to Tanir Bavi project.
The officials said that the state support
agreement too had been signed apart from extending fuel linkage agreement
and the power purchase agreement. The letter of credit has also been
provided. The PPA for the barge-mounted project was signed in December
1997.
The promoters of the project, the GMR Vasavi
group and its associates hold 51 percent in the project while the rest is
held by the US-based PSEG Global.
The promoters of the project had petitioned to
the Centre to remove import parity on naphtha as high naphtha prices,
import parity and customs duty had escalated the power purchase cost.
The decision to sign an MoU with BPCL is to get
cheaper fuel so that the entire cost structure is brought down. Though the
quantum of gas required by Tanir Bavi is small, it will be the first power
project in Karnataka to get gas from BPCL. The promoters are also
understood to have informed BPCL that they were even willing to share the
cost of the pipeline from Kasargod to the project site.
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