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Wednesday, Jan 28, 2004

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Reliance to set up 3500 MW gas-based power plant in UP

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Mr Anil Ambani, Vice-Chairman & Managing Director, Reliance Industries, the Samajwadi Party Leader, Mr Amar Singh, the Chief Minister of Uttar Pradesh, Mr Mulayam Singh Yadav, and Film Star, Mr Amitabh Bachchan, at the Uttar Pradesh Development Council Meeting in the Capital on Tuesday. - Kamal Narang

New Delhi , Jan. 27

RELIANCE Industries Ltd on Tuesday announced plans to set up the world's largest power plant in Uttar Pradesh, having a capacity of around 3500 MW.

"The project will produce power at a cost of around Rs 2 per unit and will operate on domestic natural gas produced from Reliance's gas fields in the Krishna-Godavari (KG) basin in Andhra Pradesh," Mr Anil Ambani, Vice-Chairman, Reliance Industries Ltd, said at a press conference here.

The project, which will be completed in phases of 1000 to1500 MW each, will entail an investment of Rs 10,000 crore. The first phase will be completed in three years' time. The company is in the process of selecting a project site. Power produced from the project will serve Uttar Pradesh, Delhi and other northern States such as Rajasthan.

As part of the reform process, Rajasthan is in the process of privatising the power distribution business while Uttar Pradesh has expressed its intention to do so.

Mr Ambani was confident of the capacity addition notwithstanding the current financial issues plaguing the power sector. The power sector consists largely of State-owned monopoly buyers (state electricity boards) from the generation companies, which are bankrupt owing to theft of power as well as subsidies.

According to Mr Ambani, the project was viable on the back of the consumer base that Reliance has access to. BSES Ltd, a Reliance group company, serves power distribution zones in Delhi and Mumbai. Mr Ambani was, however, confident that power sector reforms would take off in Uttar Pradesh, which recently announced its power policy.

The policy entails privatisation of power distribution zones.

In the event of the reforms not taking off, Reliance's power plant will feed Delhi and Mumbai distribution zones, to some extent displacing the existing power suppliers. In the case of Delhi, the main supplier is National Thermal Power Corporation (NTPC), which supplies 1300 MW.

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