Ansaldo Eyes Vijaynagara Project

Italian engineering contractor Ansaldo Energia plans to bid for several thermo-electric power projects in the country in an attempt to increase its market share to around 20 per cent. Ansaldo has decided to bid for the erection, procurement, construction (EPC) contract for the 500 X 2 mw Vijayanagara thermal power project. It has emerged as L1 bidder against tenders of Ahmedabad Electric Company's 2 X 30 mw STG and Madhya Pradesh Electricity Board's Korba (East) 2 X 120 mw rehabilitation project. A spokesperson for Ansaldo told Business Standard said the company is keen to increase its presence in India. It has already started implementing a restructuring programme involving capital restructuring, focused marketing strategies as well as reorganisation of the human resource.

Ansaldo is owned by Finmeccanica, which in turn is owned by IRI, a government of Italy undertaking.

Ansaldo also has an industrial agreement with the Kirloskar group in the areas of industrial automation and steam turbines.

The total cost of the Vijayanagara power project is around Rs 1,800 crore.

The main promoter of the project, Karnataka Power Corporation Ltd (KPCL), plans to spin off a separate company for the power project in which it will hold 26 per cent stake. The rest of the equity will be offered to financial institutions and others. The project will have a debt-equity ratio of 70:30. While KPCL will pump in Rs 140.05 crore, Rs 398.6 crore or 74 per cent of the equity will come from the private sector.

Plans are to raise Rs 1,006.84 crore from financial institutions and the rest (Rs 350 crore) by floating bonds. KPCL plans to acquire around 600 hectares of land for the project. The project was earlier awarded to the HOK International but because of lack of interest by the promoters, KPCL was awarded the contract. KPCL has already prepared a feasibility report and sent it to the Central Electricity Authority for clearance.