Marubeni Picks 30% In Dyna Tn Power Unit

Japanese equipment major Marubeni has picked up a 30 per cent stake in the Apollo Hospital-promoted Dyna-Makowski power project in Tamil Nadu.

The deal follows the withdrawal of the UK-based International Generating Company Ltd (InterGen) from the power project. Marubeni has picked its stake, approximately Rs 100 crore, through its investing arm Marubeni Power Development Co.

Earlier InterGen held 60 per cent (roughly Rs 200 crore) of the equity in the project, while the balance is held by the Chennai-based Apollo group.

Marubeni is also expected to execute the complete Erection, Procurement and Construction (EPC) contract for the project. The EPC contract is expected to be around Rs 770 crore. InterGen was forced to withdraw after equipment major Bechtel Enterprises take over of USGen, InterGens parent in the US, last year. As per the understanding between Bechtel and InterGen, the latter will be Bechtels project development arm.

Therefore, Bechtel had to be the equipment supplier for all the power projects being developed by InterGen.

However, as per a government order issued last year, projects being promoted through MoUs, will have to select the EPC contractor through the international competitive bidding (ICB) route.

This implies that even if Bechtel had bid for the supply of equipment for the Dyna-Makowski project-being promoted through the MoU route- it may not have been awarded the contract . The uncertainty prompted InterGen to think in terms of a withdrawal and concentrate on smaller and captive projects where ICB is not mandatory.

Initially, USGen had picked up 60 per cent stake in the project (1993), which was transferred to InterGen in 1994-95.

Pacific Electric and Gas of the US had 90 per cent stake in USGen/InterGen while the balance was held by Bechtel. Pacific Electric and Gas divested its stake to Bechtel late last year, as it did not want to promote projects in other countries.