The Hindu Business Line : NLC inks pact with Gujarat for mine, power project

MR S. JAYARAMAN, Chairman and Managing Director, Neyveli Lignite Corporation Ltd, and Mr Narendra Modi, Gujarat Chief Minister, at the signing of an MoU in Chennai on Friday. — Bijoy Ghosh

Chennai , July 28

Neyveli Lignite Corporation today signed an agreement with the Gujarat Government for setting up a 12-million tonne a year lignite mine and a 1,500 MW power project.

Mr S. Jayaraman, Chairman and Managing Director, Neyveli Lignite Corporation, signed the agreement with Mr Balwant Singh, Principal Secretary - Energy & Petrochemicals, Gujarat Government, in the presence of the Gujarat Chief Minister, Mr Narendra Modi.

NLC's stake in the joint venture with the Gujarat Government or any of its designated entities will be between 74 per cent and 89 per cent, and the Gujarat Government the balance. The exact shareholding pattern will be worked out shortly.

NLC has estimated the total cost of the project at Rs 7,500 crore and it would be executed in a debt equity ratio of 70:30, according to Mr Jayaraman.

The project will be implemented in five years from the day of signing a memorandum of understanding. Power from the project will be supplied to Gujarat and other States in the western region on an agreed upon formula.

The first phase of the project will have a mine of 8 million tonnes a year and a 1,000 MW power plant.

The project is expected to be commissioned by July 2011, according to Mr Jayaraman.

He said that NLC had started construction of a 250 MW lignite-based power plant at Barsingar in Rajasthan while work on a mine there would start shortly. NLC would expand its power generating capacity to 1,000 MW in Rajasthan with another 250 MW at Barsingar and 500 MW at Riri.

Mr Modi said NLC's project would come up at Valia-Mangrol in South Central Gujarat and promised assistance to set up the project on a fast-track basis. Besides this project, the Gujarat Government was planning another 2,250 MW of lignite-based power plants in the State. The State's power generating capacity now was 9,300 MW and peak demand estimated at 14,000 MW by 2012, the power sector offered enormous scope for investment, he said.

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