CHENNAI: Power equipment company Bharat Heavy Electricals (BHEL) has urged the Tamil Nadu government to reconsider its decision to cancel the joint venture with it for the R8,000-crore Udangudi power project in Tuticorin.
AK Ghosh, chief executive officer, BHEL Power Sector Southern Region (PSSR), said, “We have written to the state government that with our capacity enhanced to 20,000 MW and considering our order-book size, if the job is given to us, we will complete the project in the set target of December 2015.” Speaking to reporters, he said there was no delay by BHEL in taking up the project as had been alleged by the state government.
It may be recalled that Tamil Nadu chief minister J Jayalalithaa, in February, had scrapped the joint venture between the state government and BHEL to set up the 1600-MW Udangudi power project, citing lack of progress on the project. The memorandum of understanding for the project was signed in 2007. Jayalalithaa had said that the state government would go ahead with the project on its own and accused Bhel of non-co-operation. She also alleged that the project was getting delayed since the Union environment ministry was not giving its nod, stating that long-term coal linkage was not available for the project.
“If the government wants to go ahead with another partner, it would take some months to complete negotiations and finalise the new partner, whereas if we take up the project, we will meet the target of commissioning the project by December 2015,” said Ghosh.
With the project getting delayed by four years, the government had decided that TNEB would go ahead with the project on its own. It will also get megapower status since it will be implemented by TNEB on its own and it will also get tax incentives, which will bring down the project cost.
As per the MoU, TNEB and BHEL were to hold 26% each in the company, while the remaining 48% will be held by the private partner and a financial institution which are supporting the project. However, till May 2011, none of the private players had picked up the stake, Jayalalithaa had said.
BHEL PSSR is expected to commission around 4,250 MW through various projects in next six to eight months. This include two 500-MW thermal projects for NTECL in Vallur, two 250 MW thermal projects for Neyveli Lignite Corporation in Neyveli, two 600 MW thermal projects for TNEB in North Chennai, 1000 MWe of nuclear project for NPCIL in Kudankulam and a 500 MW thermal project in Tuticorin, all in Tamil Nadu.
The company has posted a turnover of R1,200 crore for the financial year 2011-12, a 17.17% drop from the last years’ R1,449.12 crore turnover. It has also reported a loss before tax of R33.60 crore as against the profit before tax of R99.47 crore posted during the same period of previous fiscal year. ‘’While the turnover target was around R1,500 crore, due to some strategic realignment of projects, which resulted in transfer of around two projects of PSSR to the Eastern Region unit, the turnover and profit before tax got a beating,” he said. The unit is expecting around R1,900 crore turnover by the end of current financial year this year. it had invested close to R80 crore during 2011-12 towards augmentation of capital equipment.