Financial Daily from THE HINDU group of publications
Monday, Jan 31, 2005
Industry & Economy
Gujarat to spend Rs 10,000 cr on new power generation capacity
Mumbai , Jan. 30
THE Gujarat Government is planning to spend close to Rs 10,000 crore on adding 2,500 MW of lignite-based power generation capacity in the State, over the next three years.
The investments will come through the State-owned Gujarat Industries Power Company (GIPCL) and Gujarat Mineral Development Corporation (GMDC), said Mr P.K. Laheri, Chief Secretary of Gujarat, here.
He was speaking at a press conference to highlight the performance of five of the State-run companies he called `Pancharatnas'. These include Gujarat Alkalies and Chemicals Ltd, Gujarat State Fertilisers Ltd, Gujarat Narmada Fertilisers Corporation Ltd, GIPCL and GMDC.
Mr Laheri said the State Government has, for the time being, decided against divesting its stake in any of its State-owned companies. Instead, he said, the companies will `re-invest' their resources in new projects.
Most of the investment will be in the three crucial sectors of water, energy and infrastructure projects such as information technology, roads and ports, he said.
According to Mr Laheri, GIPCL will double capacity at its 250 MW at Surat apart from putting up 2,000 MW of greenfield capacity in South Gujarat. GMDC is putting up a 250 MW plant at Akrimota at a cost of Rs 1,395 crore.
According to Mr L. Chuango, Managing Director, GIPCL, the company plans to invite private sector partnership for its 2,000 MW power project.
"We are mulling two options - raise money through inviting a private sector partner in a special purpose vehicle or through a public issue," Mr Chuango said.
The company may even approach the equity markets to raise money, Mr Laheri said.
GIPCL has already tied up debt worth Rs 2,000 crore, more than two-and-a-half times the requirement, for its 250-MW expansion.
It is also setting up two gas-based projects of 145 MW and 160 MW at Vadodara.
The State Government is favourable to the idea of granting management control to a private sector partner even if it holds 51 per cent in a joint venture, Mr Chuango said.
For any private sector company bidding for participation in setting up power projects, the main consideration will be cost of power.
"The (generation) cost of power will have to be below Rs 2 a unit," he said.
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