Power major BSES has shelved its plans to acquire the 360-mw Gautami Power project in Andhra Pradesh promoted by the Rajus of Satyam Computer Services.
R V Shahi, BSES chairman and managing director, said: "We have decided not to go ahead with our plans regarding Gautami Power as that project exists only on paper. It makes more sense for us to expand our 220-mw power plant at Samalkot in Andhra Pradesh subject to the permission by the state government."
Gautami Power executive director NG Chin Meng could not be reached for comment. B Ramalinga Raju, chairman of Satyam Computer, also could not be reached for comment.
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BSES had been in talks with the Rajus for buying out their stake in Gautami Power. Although the exact stake of the Rajus in Gautami Power could not be ascertained, Shahi had told Business Standard in November last year that BSES was eyeing a controlling stake in the company. This is in line with the BSES policy of picking up a minimum 51 per cent stake in any company which it acquires. BSES had reached this decision after it burnt its hands while implementing a management contract in Orissa a few years ago.
The BSES-promoted Samalkot project is close to the proposed Gautami Power project. It can hike the capacity of the project further subject to government clearances as the project was awarded through the competitive bidding route.
The Gautami acquisition would have enabled the company to hike the capacity of the project to 600 mw and emerge as a major player in the state especially as there is a cloud over the Hinduja-National Power consortium-promoted 1000-mw plus power project at Visakhapatnam.
BSES is a major force in Maharashtra as it already has a 500-mw thermal power station in Dahanu. It plans to set up another 495-mw power plant at Saphalwe in the state and also holds the rights to distribute power to a large part of south Mumbai.