The Maithon right bank thermal power project of the Damodar Valley Corporation (DVC) has been put on the priority list for loan from the Overseas Economic Cooperation Fund (OECF). DVC has managed to pose the project for Japanese assistance after facing many a problem in the last three years.
However, the DVC management is not sure if the Government of India will back its proposal to set up the project with Japanese loan since the Centre had been pushing for a proposal to revive the Russian offer to finance the project with its funds lying in India.
Left to DVC, its management would prefer to go ahead with the project on its own with OECF assistance. It would enable DVC increase the size of the project from four 210 mw units to four 250 mw units. Besides upscaling the project from 840 mw to 1000 mw, DVC will also be able to float a global tender and buy the best available technology.
More From This Section
Acceptance of Russian loan will require sourcing the main equipment package from Russia. DVC considers the Russian technology dated. Moreover, the project size will be smaller by 160 mw.
The Maithon right bank project had been hanging fire for nearly a decade. Fund-starved DVC agreed to accept Russian help when the USSR did not disintegrate. The proposal fell through with the Communist state withering away.
This was followed by an interesting proposal from the Mumbai-based private power agency, BSES. The proposal was to form a joint venture between DVC and BSES, while DVC will guarantee purchase of the entire output. Even before the two parties resolved their difference on who will keep the majority stake in the new company, the union ministry for power said that DVC's participation in a joint venture with a private company required an amendment of the DVC Act, 1948.
There are still supporters of the joint venture proposal, both within the DVC and the power ministry.
The DVC management, however, began to scout for some other foreign assistance.
But the project was not given priority status by OECF in the last three years.
With the chance of netting the loan a distinct possibility, DVC is busy updating the detailed project report to present to OECF. But DVC being under the central control, the final decision on the source of funds for the power project will be taken by the Government of India.