Us Firm May Pick Up 10% In Reliance Power Spv

The North American Coal Corporation (NACC) is likely to pick up a 10 per cent equity stake in a special purpose vehicle to be floated by Reliance Industries Ltd for the implementation of a Rs 2000 crore (approximately), 500 mw power project in Jayamkondam, Tamil Nadu.

A Reliance-led consortium with NACC, Foster Wheeler Corporation and Electric Power Asia had bagged the letter of intent for setting up the project last week.

The state-owned Tamil Nadu Industries Development Corp-oration had floated a tender for the project in November, 1996. The Reliance-led consortium had edged out two other consortia led by L&T and the Polysindo group in the tendering process.

The fully integrated project envisages the mining of 3.5 million tonnes of lignite and the generation of 500 MW of power per annum in the first phase. It will gradually be expanded to a generation capacity of 1500 MW.

NACC will provide the mining expertise for the project. In fact, it was the NACC's proposals

for mining the lignite which helped the Reliance consortium bag the project, government sources said.

The low-cost of mining under NACC'c proposal helped the consortium peg its real average tariff (RAT) lower at Rs 1.06 per kwh. On the other hand, the L&T bid had a RAT of Rs 1.69 per kwh and the Polysindo bid had a RAT of Rs 1.30 per kwh.

Among the other two players in the Reliance-led consortium, Foster Wheeler Corporation will be responsible for operations and maintenance and Electric Power Asia will provide the engineering procurement and consultancy support.

The possibilities of these two players picking up an equity stake in the SPV are also open, it is learnt. However, a final decision will be taken only later.

Some work on the project has already been done by the Jayamkondam Lignite and Power Corporation Ltd (JLPC). This outfit is now likely to be merged with the SPV to be floated by Reliance.

Government sources said Reliance would be given full support and operational flexibility for the implementation of the project.