GMR bullish on power, plans to buy coal mine in Indonesia

 

The GMR Group plans to buy a coal mine with reserves of 100-150 million tonnes in Indonesia to feed 1,500 megawatt power generation capacity for 20 years. The deal is likely to be struck within three months.

"The company has plans to set up a 1,000-1,500 megawatt coal fired thermal power plant on the western coast and has already done the land survey in Maharashtra and Gujarat," GMR Group Chief Financial Officer Subba Rao Amarthaluru told reporters here today.

Divulging details about the company's entry into the power sector, he said, "The company would increase its domestic power generation capacity from 800 megawatts to 3,000 megawatts by 2013."

He also said the company's 1,050-megawatt coal fired power plant in Orissa would be operational by March 2010. While he remained tight-lipped about the group's future investment plans, he nevertheless said the power sector has the potential to deliver higher returns considering the EPC cost is down to around Rs 4 crore per megawatt from the earlier Rs 5-6 crore.

He added, "Power is an essential commodity, you cannot postpone the demand. Considering the huge demand of power in our country, this sector will yield higher returns in the short term".

In response to a query on air passenger traffic, he said it is down 1% in Delhi and 5-6% in Hyderabad and will further come down.