MCL hopes to find partner for 1600 Mw power plant by Jan 2013

Coal India subsidiary Mahanadi Coalfields Ltd (MCL), which intends to use huge reserves of coal lying at one of its mines for power generation, expects to find a suitable partner for the proposed 1600 Mw plant by January next year.

The company has got 41 responses after its Expression of Interests (EoI) meeting in August last year, where companies such as Tata Power, Adani, Nalco, GMR, Essar Power etc participated. The company will shortly go for Request for Qualification (RFQ) meeting for the bidders.

"The combined application (permission seeking state government nod) has been accepted by the state and it has been referred for the clearance to the state level single window clearances authority (SLSWDA). We will be going for RFQ by July and the successful bidder will be awarded the contract by January next year,” said Kulamani Biswal, director of finance, MCL.

The total project cost is pegged at Rs 8,000 crore. MCL will supply coal for the power plant from its Basundhara mine and will also arrange land for the project. To produce 1600 Mw power, the thermal power plant will require about eight million tonne coal a year. Currently, the Basundhara mine produces 12.5 million tonne (MT) per annum and the production is expected to up to 34 MT a year in future.

MCL proposes to build the project through a joint venture (JV), where the coal miner will hold at least 26 per cent stake. The share holding may be revised upward to 49 per cent later. In the upcoming RFQ meeting, MCL will decide whether the bidder will be allowed to only produce power and take its profit or to sell power in commercial market and share the profits with MCL.

"We are yet to discuss these things and hope to come out with a solution before the RFQ meeting in July, as it will be immediately followed by request for proposal (RFP) meeting, where bidders will quote commercial and financial figures for the JV,” explained Biswal.

MCL has created a special purpose vehicle for the power project, named as Mahanadi Basin Power Limited. It has recently concluded environment impact assessment study for the project. .