Kolkata, Jan 17 : Rama Prasad Goenka's Balagarh power project has seen its cost shooting up by nearly 50 per cent over the years, as it heads for financial closure on January 31. The river island project is being promoted by Balagarh Power Co, a subsidiary of Goenka-controlled CESC Ltd.The project cost will decide the rate at which it will sell power to CESC, which has 1.6 million consumers in Kolkata and surrounding areas. CESC itself is already pleading for a tariff hike.Envisaged in 1994, the 2x250mw project has been battered by the rupee's slide against the dollar. When it was cleared by the Central Electricity Authority, the price tag was Rs 2060 crore, with foreign debt at Rs 1273 crore and foreign equity at Rs 413 crore. At that time, the rupee was going at 31.50 to the dollar.
Balagarh will add to the capacity at CESC's command and reduce its dependence on outside agencies like the West Bengal State Electricity Board. The total debt will be Rs 1,373 crore and equity Rs 685 crore, with promoter CESC ultimately holding 30 per cent. Southern Energy Asia-Pacific Ltd, a wholly-owned unit of US-based Southern Energy, will hold 26 per cent.ICICI Ltd will hold seven per cent, and it is understood that Industrial Development Bank of India also wants a stake.
South Korea's Korea Heavy Industries & Construction Co Ltd (Hanjung), the engineering-procurement contractor, will be picking up 10 per cent, Washington-based International Finance Corp five per cent, Manila-based Asian Development Bank 8.5 per cent and Singapore's AIDEC 13.5 per cent.As of now, Balagarh has a paid-up capital of 95 equity shares of Rs 10 face value, of which CESC holds 70 and Southern Energy 25.
The first unit is expected to be completed within 33 months of financial closure and the second in 36 months, while the project will start operations in 2002-03.
Following the slide of the rupee by over 50 per cent to around Rs 46.50 to the dollar, the foreign debt and equity will account for Rs 2478 crore against Rs 1685 crore estimated earlier, pushing up the project cost to Rs 2852 crore from the estimated Rs 2060 crore.
Analysts said the project cost will influence the power purchase agreement between CESC and Balagarh. CESC itself has already petitioned the West Bengal Electricity Regulatory Commission for a tariff hike of around 27 per cent. Korea's Hanjung, apart from holding a stake, will be responsible for managing the project, running the plant and maintaining it.
The project will be built on an island in the river Hooghly, about 100km upstream of Calcutta. The company has acquired 670 acres out of 1050 acres needed for the project, apart from 32 acres on the mainland. The project has, so far, been funded by unsecured loans adding up to Rs 53.37 crore from CESC.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
