PPA for Bhadravati project signed

MUMBAI, Aug 3: Ispat Industries on Monday signed the power purchase agreement PPA for its 1,082 mw Bhadravati power project with the Ma...

MUMBAI, Aug 3: Ispat Industries on Monday signed the power purchase agreement PPA for its 1,082 mw Bhadravati power project with the Maharastra State Electricity Board MSEB after much-delayed project received the Centres counter-guarantee last week.

Speaking at the PPA signing ceremony, Maharastra chief minister Manohar Joshi said the PPA for Reliances Patalganga power project and Enron8217;s Phase II at Dabhol would be signed within a month. Regretting the delay in getting the clearances from the Centre, Joshi said the state government would extend all help so that the power projects could take off as soon as possible.

The financial closure for the Rs 4,556 crore project in Chandrapur district would be completed by next year. Ispat has floated a separate company 8212; Central India Power Company Ltd 8212; in which it will hold 53 per cent stake while Alsthom and Electricity de France would hold 32 per cent and 15 per cent stake respectively.

With this, all governmental clearances for the Missal8217;s project arein place and the promoters would now concentrate on raising funds. The land development work for the project at Bhadravati has already commenced. The project was first conceived in 1993 after the Rao government liberalised the power sector and also cleared eight acirc;euro;tilde;fast-track projects. However, due to procedural delays, the project did not get the counter guarantee till last week.

The chairman of Ispat group, M L Mittal, said that the group would be able to commission the project within the next 43 months. The first unit will be commissioned within 39 months by April 1, 2002 and the second unit will go on steam in 43 months by August 1, 2002.

The government of India has given the counter guarantee for the entire 800 million foreign debt. The union government also guarantees 85 per cent of plant availability for 20 years.

The coal for the project would be supplied by the captive mines of a group company 8212; Central India Coal Company 8212; under a separate coal supply agreement. The cost of power to thestate would come to around Rs 1.80 per unit.

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The defence ministry which had earlier raised objections to one of the projects coal procurement sites in Baranj has acirc;euro;tilde;acirc;euro;tilde;conducted necessary tests and is close to giving its clearance, Ispat vice chairman and managing director, P K Mittal, who along with MSEB Chairman, Asoke Basak signed the PPA, claimed.

The entire equity of the project will come from non-resident Indians and a consortium of foreign institutions, including ECGD Britain and Cofax of France, who have agreed in principle to give a loan of Rs 3,740 crore 880 million. Alstom has been awarded the engineering, procurement and construction contract for the project.

MSEB chairman Asoke Basak said that the term of PPA will be 30 years with the provision of extension of 10 years and incentive will be given on 0.7 per cent for every rise above 68.5 per cent plant load factor.