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BSES plans to invest Rs 1,800 cr in Saphale — To obtain gas from ONGC, Reliance

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MUMBAI, Sept. 21

BSES Ltd expects an investment of about Rs 1,800 crore to Rs 2,000 crore in its proposed Saphale power project near Mumbai, Mr S.S. Dua, Acting Chairman and Managing Director, BSES Ltd, said here today.

"We plan to increase Saphale's phase-I capacity from 330 MW to 500 MW and also plan to invest in an undersea pipeline to transport gas from ONGC's offshore gas fields. The money will be raised when required. We have a debt to equity ratio of 30:70 so it should not be a problem,'' Mr Dua told newspersons on the sidelines of BSES' annual general meeting.

He said apart from the Saphale project, the Oil and Natural Gas Corporation Ltd (ONGC) has agreed to supply 1.6 million cubic metres gas per day to its 500 MW Dahanu power plant.

"We have also been assured of gas supply from Reliance Industries Ltd which will be made available by December 2003, although we have not yet worked out the quantity and price details,'' he said.

ONGC has agreed to sell to BSES gas from its C-22/24 gas fields off the western coast. This would require laying undersea pipelines of 113 km from the fields up to the coast and another 17 km to Saphale.

Mr Dua told shareholders that by March 2003, all three distribution subsidiaries in Orissa - Southco, Westco and Nesco - would see a turnaround.

"While Southco and Westco are already exceeding collection targets, Nesco is expected to join their rung within the next three months,'' Mr Dua said.

He defended BSES' decision to enter distribution in Orissa and Delhi. "Power business requires three-five years gestation period to fructify,'' Mr Dua said.

When answering a question on BSES' drop in profits this year, Mr Dua said that along with an increase in fuel costs, the company had to buy expensive power from Tata Power Company while selling it at cheaper tariffs to its suburban customers. BSES has not raised tariffs since 1994, he said.

"We are trying to source power from other sources but TPC being the bulk licensee for Mumbai we have to buy power from it to meet our excess power demand for the city,'' Mr Dua said.

He said NTPC has offered to sell power to BSES as also the Goa Electricity Board which has offered another 40 MW.

Mr Dua also ruled out any further investments in BSES Telecom Ltd.

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