By Noor Mohd, IANS
New Delhi : Bharat Heavy Electricals Ltd (BHEL) has won the Rs.19 billion contract from GSPC Pipavav Power Company (GPPC) to implement its 2 x 350 MW gas-based power project in the Amreli district of Gujarat.
“BHEL beat competition from Larsen and Toubro to bag this contract,” said Sudir Shah, the company’s official in charge of the tendering process.
GPPC is a subsidiary floated by Gujarat State Petroleum Corp (GSPC), the state government-owned oil and gas supplier, for implementing the project. The developer expects to commission the project by Sep 2010.
Gujarat Urja Vikas Nigam will purchase power generated from the project.
According to officials, the promoters plan to finance the project, which is estimated to require a total investment of Rs.24 billion, in a debt-to-equity ratio of 75:25, instead of the industry norm of 70:30.
While the promoters will arrange the equity, a consortium of lenders including key financiers like Power Finance Corp and IDBI has sanctioned the required loan of Rs.18 billion for the project.
“We hope to sign the loan agreement for the project with interested lenders in a month’s time,” said Shah.
He further said that an expert committee of the environment and forests ministry was also expected to issue a clearance after taking a final look at the matter during a meeting scheduled Oct 15.
“The developer has already in place approvals required from the state pollution control board and forests department for implementing the project,” he added.
Under a long-term agreement, GSPC will supply 3.2 million standard cubic metres of gas at market-determined prices to help the project meet its fuel requirement on an assured basis.
The variable component of the electricity tariff at the estimated project cost works out to Rs.3.33 per unit. But the state electricity regulatory commission will decide the final tariff for the project, said officials.
Meanwhile, following a direction from the state government, GSPC has initiated talks to rope in Gujarat Power Corp as an equity partner for implementing the project.
The state-sector power generator’s equity share in the project, though yet to be finalised, is expected to be non-controlling.
The Pipavav power project, conceived as far back as in 1990 by the then Gujarat state electricity board, was languishing until recently due to non-availability of long-term gas supplies.
The project could take off only after GSPC agreed to supply gas on a long-term basis. The project is envisaged to have a total capacity of 2,100 MW after implementation of capacity expansion envisioned under phase II and III.
On completion, the project is expected to provide a big relief to the state, which is facing an acute power shortage.