Modernisation of these units will be considered as a pilot project and based on this, other units may also be taken up for refurbishment subsequently.

A memorandum of understanding for the project was recently signed between MSEB and EEL, following which a delegation visited the power stations. According to the agreement, the power company will also arrange finance through long-term loan or lease arrangement.

Terms of reference are being drawn by the board in consultation with the company for the pre-feasibility study. The report will be submitted by next month.

The final agreement for the actual work contract will be worked out after the proposed study and adetailed project report (DPR) which will also include the technical and economical requirements of the project.

The power developer will engage Babcock & Wilcox (B&W) also of the US which has developed a technology of boiler upgradation by maximum use of the existing frame and material of boiler at the site. It has also assured speedy refubishment and replacement of units. The company made a presentation to an Indian delegation from the state during its recent visit to the US and agreed to work with EEL for the two units as demonstration projects.

McDermott, parent company of B&W, has agreed to support the proposal. B&W has had a long presence in the Indian power sector and the boilers in the proposed units are made by the company. The company also has a joint venture with Thermax in Pune.

There are several units in MSEB which are old and do not operate on full capacity. The board has set an agenda to gradually have them revamped to enhance power generation capacity in the state. The refurbishment andmodernisation (R&M) route is not only faster but also cost-effecetive.

To encourage R&M projects, the centre had earlier announced private investment in the area on a build, own and transfer basis. The states could also set up joint venture for the same projects. To provide financial support to these projects, Power Finaance Corporation (PFC) has offered a low interest long-term loan to state electricity boards.