Tatas to take hold of Mundra project

Even as the 4,000 mw Sasan ultra mega power project in Madhya Pradesh lies in limbo, the other ultra mega project in Mundra (Gujarat), which was put up for bidding along with Sasan, will soon be owned by the winning bidder "" Tata Power.

The Power Finance Corporation (PFC) "" the nodal agency for ultra mega power projects "" is targetting the transfer of the shell company floated for the Mundra project to Tata Power by May 1, 2007. This is over two months behind schedule.

The shell company "" Coastal Gujarat Power Limited (CGPL) "" was floated by PFC to take statutory clearances for land, water linkages and environment from Gujarat government. The project relies on imported coal as fuel.

Along with merging the shell company with itself, Tata Power will sign the power purchase agreement (PPA) and submit performance bank guarantees worth Rs 300 crore.

Tata Power had won the award for building the Mundra project by quoting the lowest power tariff of Rs 2.26 per unit, outbidding Reliance Energy (Rs 2.66 per unit), Adani Exports (Rs 2.70), Larsen & Toubro (Rs 3.22), Sterlite (Rs 3.74) and Essar (Rs 4.06) per unit.

On December 28, 2006, it had received the letter of intent (LoI) for award of the project. The same day, Lanco-Globeleq had received LoI for Sasan mega project in Madhya Pradesh.

The transfer of the shell company, the signing of the power purchase agreement (PPA) and the submission of bank guarantees was to have been done within 60 days of getting the letter of intent (LoI) i.e. by February 26. However, due to a delay in statutory clearances to be taken from the state government, PPA and merger of shell company for Mundra project didn't take place.

Tata Power has given a schedule of about 48 months for building the Rs 16,000 crore project in five units of 800 mw each. The financial closure is expected around August 2007. The other seven proposed ultra mega power projects are at various stages of starting up.