Tata Electric, Dvc Venture May Handle Tisco Load
The Tata Electric Companies (TEC) and the Damodar Valley Corporation (DVC) are discussing the idea to set up a joint venture company to handle the entire power requirement of Tata Steels units at Jamshedpur.
However, the two sides are yet to reach a consensus on the scope of the joint venture. TEC chairman H N Sethna and DVC chairman B Sengupta met recently for the preliminary round of talks.
This was followed by the exchange of specific proposals by both the sides. DVC is now expected to refer the proposal to the union ministry of power, and also place the issue before its own board.
Sethna has proposed the following steps:
* the entire Chandrapura station of DVC in Bihar, which requires a revamp, should be handed over to the new company, and dedicated to Tata Steel with an expected regular output of 500 mw
* The transmission line linking Chandrapura with Jamshedpur should also come under the joint venture
* DVC will lease out the power station for 40 years
* Tata group must be given 76 per cent equity while the rest 24 per cent will be held by DVC
* The lease rate will be decided on the book value of the station.
DVC, on the other hand, has put forward a different set of proposals which includes:
* The existing 200 mw supply to Tisco should continue to be catered directly by DVC from its own pool of power as this is a technical requirement for `balancing the system
* The transmission line cannot be handed over as it is part of DVCs total transmission network
* The equity for the joint venture should be held equally by both the partners
* The lease should initially be for a period of 15 years with the scope to extend the period
* The lease fee will not be on book value but on the market value of the asset
* DVC does not want to lose its right to sell power to ACCs plant, and would like the new company to restrict itself to meet the additional requirements of Tisco.
TEC had recently taken over the operations of Tiscos captive power plants around Jamshedpur.
Sethna would like the joint venture company to supply power to other Tata group of companies in the region including ACCs cement plant. Currently, DVC supplies 200 mw of power to Tisco from its various plants. Tisco also has several captive power generating units with a total capacity of about 150 mw.
TEC proposes to set up another captive thermal power station with a capacity of 240 mw to meet the growing requirements of Tisco.
At one point, DVC had suggested that there is no need to locate a thermal power plant close to Jamshedpur which will only result in increasing the pollution level in the steel town. It had also argued that it was in a position to guarantee the additional supply.
This led to discussions that there could be a joint venture power company to formalise the arrangement.
An idea was mooted that thenew company could draw the entire supply from a single dedicated power station.
The ageing, 780 mw Chandrapura station needs to go through a renovation and modernisation (R&M) programme which is expected to cost around Rs 1 crore per mw. It was felt that this station could be handed over to the new company which can then take up the R & M programme.
In comparison, Tata Electrics proposed 240 mw plant will cost nearly Rs 1,000 crore at the rate of Rs 4 crore per mw. So, a renovated Chandrapura plant will be cheaper for Tisco besides saving the Jamshedpur populace from the threat of additional pollution.
Besides 240 mw for the steel mill, Sethna indicated that he would like to get another 70 mw for ACCs plant close to Jamshedpur. The new company will also take over the existing DVC supply of 200 mw to Tisco. Put together, the requirement adds up to 510 mw.
A renovated and modernised Chandrapura station can guarantee 450 mw at 60 per cent load factor. If the operational efficiency is improved, the output can be over 500 mw.