CIL to foray into power generation

Coal major to have 50:50 joint venture with Neyvelli Lignite.

Coal India Ltd is likely to foray into power generation this year.

The proposed joint venture power project between the coal behemoth and Neyvelli Lignite Ltd (NLL) is likely to commence by December 2006.

Besides, the board of CIL has cleared a proposal to form a joint venture with power major NTPC for power generation.

However, CIL is going slow regarding five per cent disinvestment through IPO route.CIL supplied 256 million ton coal to the power sector in 2005-06. Union minister of coal Shibu Soren told reporters in Dhanbad that the joint venture between Neyvelli Lignite and CIL would be formed soon.

"We do not need clearance from other ministries for the project as both CIL and NLL are under the coal ministry. I hope that by end of this year the work will start," he said.

According to him, CIL and NLL have jointly selected 2-3 sites in Santhal Pargana in Jharkhand for the project.

"Within one month, the project site will be selected," he promised. CIL chairman Sashi Kumar, who was present at the occassion, said the proposed power project would have a capacity of 1,000 megawatt. "It will be a 50:50 joint venture between us and NLL. We have estimated an investment of Rs 5,000 crore for the power project in Santal Pargana," he said.

Commenting on the joint venture with NTPC, Kumar said that though CIL board has approved the project but it would take some time, as it requires nod from other ministries too.

"Unlike NLL, NTPC is from another ministry. So we need permission from power ministry, finance ministry, steel ministry and law ministry. We have started that process," he added. However, coal minister made it clear that there was no specific proposal from CIL the ministry for IPO.

Soren was here to attend a seminar organized by Bharat Coking Coal Ltd.Earlier, commenting on Coal Videsh, Soren said that the ministry had approved in principle to form a subsidiary for overseas operation. However, he indicated that the process would take some time.