Power majors set sights on state

At least five private companies have committed huge investments

Gujarat will become the hub of private players in the power sector in the near future, if the announcements made by the state government during the last three months are any indication.

The players are expected to take advantage of the new liberal Electricity Act which provides more space for the private companies under flexible terms and conditions.

On Friday, the state government invited expression of interest (EoI) for another new power project at Ghogha in Bhavnagar district.

This indicates that the state government is now interested in inviting private parties to create power infrastructure in Gujarat, rather than opting for further investments for setting up plants through its own bodies like the Gujarat Electricity Board (GEB).

At least five major private companies have committed huge investments in the power sector during the second half of the current fiscal year.

Even the state government enterprises have made commitments worth around Rs 5,000 crore.

Gujarat is going to host the country's first liquified natural gas (LNG) terminal being developed by Petronet LNG Ltd, while another terminal is being developed by the Royal Dutch/Shell group in Hazira of Surat.

More gas projects are coming up in the state during the next few years.

While the detergent giant Nirma Ltd proposed an investment of Rs 2,200 crore for a 500 MW power plant in Bhavnagar, where the company already has its chemical plant and excess land, pharmaceutical major Torrent group has announced its Rs 4,600 crore of fresh investment in setting up two power plants in Surat and Dahej of Bharuch district.

However, none of the companies have committed any time-frame for installation of the plant machinery or the target date of kicking off operations of these plants.

The Rs 4,000 crore Adani Exports Ltd (AEL) has initiated its activities in the power sector.

To start with, the company has initiated power trading and signed an agreement to supply of 50 mw of power to the Maharashtra State Electricity Board (MSEB).

It has been learnt that Adani also may go for power distribution in future.

Minister of state for energy and petrochemicals Saurabh Dalal said, "Enthused by the response from the private players, only two days back the state government has invited expression of interest from private players for setting up a 1,375 mw power plant at Ghogha in Bhavnagar district. In fact, we are going to throw open more new projects for private parties and the state government will ensure all co-operation for the investors."

The lignite-based power plant in Ghogha is expected to bring in investment of at least Rs 800-900 crore.

"Torrent's plan to set up a mega power plant on the outskirts of Surat city with 1,000 mw capacity is taking shape and by 2005, the plant is expected to be operational. Once the special economic zone (SEZ) in Dahej is ready, the company will also set up a 156 mw power plant there which will cater to the needs of the units operating from inside the SEZ. But so far, we have not received any details from Nirma about their plans on setting up the 500 mw plant in Bhavnagar at an investment of Rs 2,200 crore in phases," said a senior state government official.

In another development, it has been learnt that Adani group, which is developing an SEZ in Mundra of Kutch district, may opt for setting up a power plant and distribution activities.

The SEZ is expected to be ready in the next four to five years.

Adani group officials were, however, not available for comments.

During the Global Investors' Summit in September, state government enterprises like Gujarat Alkalies and Chemicals Ltd (GACL) and Gujarat Industries Power Corporation Ltd (GIPCL) also announced plans for making investments in the power sector.

GIPCL has now decided to invest Rs 1,000 crore in the next three years for setting up two 125 mw plants at Mangrol in Surat in which GACL, a stakeholder of the company, is expected to make an investment.

Also, the state-owned Gujarat Paguthan Energy Corporation Ltd has informed the state energy department about its plan to set up a 1,000 mw power plant at an estimated cost of Rs 3,250 crore.