AV Birla To Review Power Play

Mumbai, May 30 | Updated: May 31 2004, 05:30am hrs
The AV Birla group wants to take a relook at its power strategy. The company which had conceived two power plants in Madhya Pradesh and Uttar Pradesh is carrying out a feasibility study of the two projects.

AV Birla group chairman Kumar Mangalam Birla said: Bina and Rosa POWER PLANTS were initiated 12 year ago. So much has happened after that in the power sector. He added that the company was exploring if the projects were competitive anymore.

Mr Birla said that officials at the corporate level of the company were undertaking the feasibility of the two projects. The final report would be out in two months time, he added.

The 578 MW coal-fired Rosa power plant was to be set up in Shahajanpur in Uttar Pradesh while the 500 MW power plant was to be set up at Bina in MP.

With the projects moving at a snails speed and hurdles to its projects, the group had said in the past that it would go slow on its power projects unless the government policies on power projects are clear. The company had been treading cautiously on its two projects.

The Bina Power Company is a 51:49 joint venture between the AV Birla Group and PowerGen (UK). The project has obtained all the necessay clearances. It has already received an escrow from the Madhya Pradesh government but has been challenged by other IPPs in the Supreme Court. This has led to escalation in engineering, procurement and construction (EPC) cost. Bina has obtained FIPB approval for raising Rs 7bn through offshore funds to pay the EPC contractors.

The Rosa Power Company is a 51:49 joint venture between the AV Birla Group and PowerGen (UK). The total cost of the Rosa project has been pegged at Rs 2,630 crore with a debt of Rs 1,841 crore and an equity of Rs 789 crore.