Karnataka Signs Joint Venture Deal with L&T for 1600 mw Plant in Chattisgarh
From Our Special Correspondent
Daijiworld Media Network

Bangalore, Feb 24: Power-starved Karnataka has taken yet another step in implementing its proposal for setting up a pit-head thermal power plant in coal-rich Chattisgrah when it signed a joint venture agreement with private sector Larsen and Toubro (L&T) for establishing the 1,600 mw super critical thermal power plant at Godhna in Chattigarh on Wednesday.

The joint venture agreement was signed between Karnataka Power Corporation Ltd (KPCL) Managing Director S M Jaamdar and L&T Chairman and Managing Director A M Naik in the presence of Karnataka Chief Minister B S Yeddyurappa.

The state government undertyaking, KPCL, and L&T will invest on a 50:50 ratio to implement the Rs 10,000 crore project and work on the project is expected to complete in three years.

The KPCL and Chattisgarh State Electricity Board have already signed a memorandum of undertaking (MoU) for implementing the project at Raipur, Chhattisgarh, on September 8, 2008. The installed capacity as per the MoU was for 1200 mw, which is now being enhanced from 1200 mw to 1600 mw.

Speaking  to reporters after the signing of the joint venture agreement, Yeddyurappa said the Chhattisgarh government has allotted 1260 acres in four villages for the project.

Land acquisition process has already commenced and the L&T has given an assurance of completing the project in three years, the Chief Minister said.

Chhattisgarh government has decided to allot an annual requirement of 1.84 tmc of water to be drawn from Mahanadi river for the project.

KPCL has taken up the assignment for conducting socio-economic survey of displaced families and the work is entrusted to Tata Institute of Social Sciences, Mumbai. The survey will help in implementing rehabilitation and resettlement programme initiated by KPCL.

Yeddyurappa said KPCL had identified L&T as a joint venture partner for implementation of the project after inviting tenders.

The Chief Minister said the state has been facing severe power shortage on account of increase in the demand from all sectors of the economy. The government has decided to add 5,000 mw to the existing capacity in its five year term and already added 740 mw last year.

L & T Chairman and Managing Director A M Naik said the company’s present order book was Rs 90,000 crore.

Answering questions from reporters, he said L&T did not have any plans for diluting its stake or selling any of the business for raising funds. The company was planning to raise Rs 500 crore to fund the project, even though it had roughly Rs 9,000 crore of cash. ``The question of tapping the capital market by diluting equity stake does not arise,” he said.

L&T was actively scouting for business and orders in the domestic as well as international markets, he added.