REL-Alstom may bag Gujarat Inds' mega power deal

A consortium of Reliance Energy Ltd. and French company Alstom is likely to get a contract to build a 300-megawatt power station for Gujarat Industries Power Co., a senior Gujarat Industries official said Friday. The proposed lignite-based plant will be located in Surat.

Gujarat Industries is likely to finalise the contract before the end of February, the official said. The new Surat plant is estimated to cost around Rs 1,200 crore.

"We are negotiating with the Reliance consortium to finalise terms of the contract, including the financial cost," the official said.

Gujarat Industries, which had earlier shortlisted Bharat Heavy Electricals-Larsen & Toubro consortium alongside the Reliance combine for the engineering, procurement and construction contract, has narrowed down its choice to the latter.

The proposed plant will be located next to Gujarat Industries' existing 250 mw lignite plant in Surat. The plant is expected to go on stream by 2009, raising the generation capacity of the company to around 850 mw.

In October, Gujarat Industries floated a follow-on public issue to fund the upcoming project. Gujarat Industries is promoted by several Gujarat government-run undertakings and Petrofils Cooperative.

Anil Ambani-run Reliance Energy has an engineering, procurement, construction division, which is involved in building power stations. The company has recently bagged an order from Haryana government to build a 500 mw power station at Panipat.