RIL To Implement EPC Contract For Jamnagar Power Project

New Delhi, January 24: | Updated: Jan 25 2003, 05:30am hrs
Reliance Group has proposed to develop its 500 mw pet coke-based power project at Jamnagar on the strengths of its own engineering procurement construction (EPC) capabilities.

A proposal has been submitted to the power ministry for change of EPC contractor from Foster Wheeler of USA to Reliance Industries Limited (RIL) for implementation of its Jamnagar power project.

In a recent letter to secretary, power, RV Shahi, Reliance Power Limited has stated that due to considerable delays in starting of the project, as also change in EPC contractor environment in India and all over the world, Foster Wheeler has indicated that they may not like to pursue EPC contracts outside USA .

It has also been pointed out that Foster Wheeler is apprehensive of holding the EPC contract price at the same levels, finalised during 1996. However, Reliance Power Limited has told the ministry that RIL would be able to implement this project at the prices negotiated with Foster Wheeler.

Officials disclosed that the nodal ministry was not in favour of this arrangement and had asked Reliance Power to award the EPC contract for this project through the international competitive bidding (ICB) route only and not through the memorandum of understanding (MoU) route.

When asked to comment, Mr Shahi said, The proposal has been forwarded to the central electricity authority for a view. Ministry sources said Reliance Power had made a fresh submission before the ministry that RIL had got sufficient in-house capabilities for carrying out engineering of various projects in multiple areas such as oil and gas, refinery, power, large chemical plants, plastic, fibres and fibre intermediates, textiles, telecom and others.

Says Reliance in its proposal to the power ministry, RIL has built captive power plants aggregating to a capacity of 700 mw at its various manufacturing locations such as Patalganga, Hazira, Naroda and Jamnagar and all these projects have been completed.

It further adds that while implementing all these projects over the last 15 years, RIL has developed immense capabilities in project finance, financial engineering, project management and EPC areas.

Reliance has also pointed out that there is only one CBFC boiler manufacturer in the world who has got the experience of supplying 100 per cent pet coke-fired boiler of this size.

As per Reliance, even if fresh ICB bids for EPC contract are invited, it may not be possible to get any price advantage as there will be only one CBFC boiler manufacturer in the world. This would merely delay implementation of the project by more than a year. After receipt of fresh EPC bid, we would be once again required to go to CEA for techno economic clearance. The project can be implemented quickly without losing another year for change of EPC contractor, it adds.