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Patel Engg plans to venture into hydel power generation

Kohinoor Mandal

Kolkata , Aug. 4

After building hydel power plants during the past five decades, Mumbai-based Patel Engineering Ltd is gearing up to become an independent power producer (IPP) in the hydel sector.

According to Mr Rupen Patel, Managing Director, the company now wants to build hydel power plants in Himachal Pradesh, Uttaranchal and in North East India. It has already sent bids for several projects in these states.

The company plans to set up big projects with capacity of 100 MW, and expects to produce around 500 MW of power in the next three to four years. "Within a year, we expect to start work on our first own hydel power project in Himachal Pradesh. This would be a forward integration by our company," Mr Patel told Business Line.

Of the total national hydel power capacity of 32,000 MW, Patel Engineering built over 7,000 MW, he said. At present, the company is building hydel plants in Arunachal Pradesh, Mizoram and Sikkim at a cost of Rs 350 crore, Rs 290 crore and Rs 270 crore respectively.

`Production only'

However, the company has decided to restrict its operations to production only. There is no plan to enter the transmission and distribution sector. "We would like to sell the power to the respective state electricity boards," he said.

The company has also taken up road projects, valued at around Rs 500 crore, including a Rs 447-crore highway project, on annuity basis. The projects are in Karnataka, Assam, Tamil Nadu and Maharashtra.

"Since the margins in road projects are always under pressure, we have decided to focus more on hydro-electricity projects, which is also our core competency," Mr Patel said.

Patel Engineering is currently implementing Rs 1,500 crore worth of projects and its order book position (projects to be implemented in the next four years) is around Rs 4,500 crore.

Of this, 40 per cent is in hydel power plants and 37 per cent in irrigation and water supply projects. Orders worth Rs 7,500 crore, Mr Patel said, were in the pre-qualification stage.

In the first quarter of 2006-07, the company reported a 70 per cent jump in net profit at Rs 20.10 crore as against Rs 11.17 crore in the same quarter of 2005-06. Total income from operations increased to Rs 311.08 crore (Rs 238.92 crore), marking a growth of 30 per cent.

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