Raytheon pulls out of Ib project

Significantly, this is the second exit staged by Raytheon in the recent months. It may be recalled that Raytheon had recently decided to pull out of the 525 MW Tuticorin power project, being promoted by Spic. Here, Swiss-Swedish major, ABB is expected to replace Raytheon and buy its 35 per cent stake in the project.

Following Raytheon’s exit, Sumitomo will now act as the leader in the consortium with BHEL and Hitachi and will also arrange for foreign funds from J-Exim and other Japanese banks. The local funds to be brought in by the EPC contractor will be arranged in association with BHEL.

BHEL and Hitachi are the co-suppliers in the consortia led by Raytheon, for boilers and turbine generators respectively. The total value of the EPC contract for the project has been pegged at around $ 400 million. Other strong contenders, shortlisted as qualified bidders for the project includes a consortium of L&T-Foster Wheeler and Flour Daniel-Tata projects combine.

Sources said that a fresh techno-economic clearance (TEC) has been awarded recently to the project by the central electricity authority (CEA). The final award of contract for the project will be decided by the project developers by the end of this month.

For the Ib Valley project, Raytheon was initially selected as the EPC contractor for the project. However, following re-configuration of the project from 420 mw to 500 mw, the project developers decided to rebid all the contracts for the project.

Even after fresh re-bidding, Raytheon along with BHEL and Hitachi of Japan was qualified for the project. Raytheon, being the leader in this consortia was to undertake the main EPC contract for the project and was also required to arrange for the foreign funds from US-Exim and other agencies.

It may be mentioned here that Ib Valley is one of the fast track projects for which the government is yet to accord counter guarantee. The promoters of the project which includes AES Corporation and Orissa government with a 49 per cent and 51 per cent stake respectively, are understood to be in the process of tying up for funds so as to achieve financial closure.

The share facility agreement was recently signed by AES with Orissa Power Generation Corporation (OPGC) when AES picked up a 49 per cent stake in OPGC. After finalising the EPC contract, other key contracts such as fuel supply agreement will be finalised thus paving the way for the project to obtain counter-guarantee from the government.