CESC arm to set up Jharkhand power unit

RPG Enterprises would float a subsidiary company under its power utility company CESC Ltd for its proposed 1000MW power project in Jharkhand.

The RPG group power utility will float the subsidiary company to set up the thermal power plant in Jharkahnd with an investment to close of Rs 5,000 crore.

A memorandum of understanding (MoU) was signed between the Jharkhand government and the RPG Group power utility here today.

The Jharkhand chief minister Arjun Munda and CESC vice-chairman Sanjiv Goenka were present at the signing of the MoU.

Later, at a press conference, Goenka told Business Standard that funding for the proposed power project in Jharkhand would be made through internal accruals, debt and equity.

Welcoming the RPG power utility to Jharkahnd, Munda said that the Jharkhand government would allow power trading to private players after the state achieved self-reliance in the power sector.

He said the power distribution system in the state would be taken away from the state-run power board and be handed over to private sector entities soon. Goenka said the state government had proposed three sites for the power plant, in the districts of Godda, Latehar and West Singhhum.

CESC would carry out necessary pre-feasibility studies within six months to select one of the three sites.

The government of Jharkhand or distribution licensees authorised by it would have the first right of claim on purchase up to 25 per cent of power delivered to the system by the proposed power station under terms of a power purchase agreement (PPA) to be mutually agreed on the basis of existing laws and regulations in force. The tariff for such power purchase will be determined by the appropriate regulatory commission.

The tentative commissioning schedule for the different phases of the power station was outlined. A 250MW unit under phase"�I would come up by January 2010.

A second 250MW module would be commissioned in April 2010. A final 500MW third phase would start generation in December2011. Munda told Business Standard that he would shortly meet Anil Ambani, the head of the Reliance Energy, to invite the company to invest in the power sector in Jharkhand.