TN to start work on Rs 8,000-cr Udangudi power project

Tamil Nadu Generation and Distribution Corporation is set to start preliminary work on the 1,330 MW Udangudi power project with BHEL exiting the joint venture.

According to an official in the know, the State Government will start the tendering out process for project. The Government had been awaiting the exit of BHEL. The project has adequate land available at Udangudi near Tuticorin. Land was not an issue for the size of the project.

BHEL officials said the company had planned to take a ‘token stake’ in the project. However, there had been no progress and the State Government had evinced interest in going ahead with the project on its own as it needed the additional power capacity to address power shortage.

The State Government had announced in February 2012 that it will implement the Rs 8,000-crore project by itself as there was no progress after nearly four years of joint venture agreement.

In December 2008, the utility, at that time Tamil Nadu Electricity Board, entered into a joint venture with BHEL to float the Udangudi Power Corporation to set up a 1,600 MW thermal power project. Both partners had decided to take a 26 per cent stake each with the balance 48 per cent coming in as debt or from a private sector partner.

However, last year the State Government announced that other than both partners allocating about Rs 32.5 crore each, there had not been any progress. Even the debt:equity ratio had not been decided and coal linkage essential to get environmental clearance from the Centre had not been obtained.

In the annual budget last week the State Government had listed this project as one of the projects to be launched in 2013-14. The others are Ennore 660 MW expansion project and Ennore-SEZ 2×660 MW project. The total investment in the three projects are about Rs 21,000 crore.

(This article was published in the Business Line print edition dated March 29, 2013)

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