Unocal Not To Ditch Bidadi Project

Despite a slash in the size and cost of the Bidadi power project, the $6-billion US partner Unocal Corporation will stick with the venture.

Following a cut in the allocation of fuel linkage by the centre, the naptha-based Bidadi project was forced to downsize its capacity from 300 mw to 105 mw and lower its budget to Rs 325 crore. The venture by the Karnataka Power Corporation (KPC) and the Fortune 500 company Unocal Corporation was initially meant to cost over Rs 900 crore.

At present, considering the project has been downsized, KPC and Unocal were involved in a budget recast. They are also reworking their equity base, holding pattern and debt equity ratio.

Apart from its investment portion in the equity base, Unocal was also expected to fork up another Rs 100 crore in the form of debt. Despite apprehensions of whether Unocal would continue as a joint venture partner, the American company was still busy holding discussions with KPC officials. The project which received its fuel linkage on July 21 was expected to sign the share holders agreement in four months thereafter. Discussions on the power purchase agreement were also expected to commence with the Karnataka Electricity Board (KEB) next month.

The venture was expected to complete their financial closure by January 21, 1998.

However, the top echelons of KPC were still unsure about Unocals commitment to the project. The company has just signed a record of understanding with us and are yet to formally convey the approval to us, a top official said.