The Hindu Business Line : Damodar Valley plans super critical power stations

The company has initiated talks with BHEL and Coal India for setting up two units in joint venture. It also plans to rope in REC and PFC as equity partners.

Pratim Ranjan Bose

Kolkata. April 5 Damodar Valley Corporation has initiated discussions with power equipment major BHEL and Coal India Ltd (CIL) to build two super critical thermal power stations as a joint venture.

The company also plans to rope in the Rural Electrification Corporation or the Power Finance Corporation as equity partners in the joint venture.

Capacity addition

Sources in DVC told Business Line that as the corporation’s IPO plan was put on the back-burner, DVC was planning to add about 3000 MW generation capacity at Raghunathpur in West Bengal and Kodarma in Jharkhand in the Twelfth-Plan Period (2012-17) through a joint venture with equipment suppliers or coal companies and domestic FIs.

The proposal includes setting up two 660 MW units (total 1320 MW ) in Kodarma in joint venture with CIL and two 800 MW units (total 1600 MW) at Raghunathpur with BHEL.

While CIL’s participation may ensure smooth supply of coal at Kodarma power station, the equity participation at Raghunathpur may offer BHEL the opportunity to commercialise its indigenously developed 800 MW technology.

According to the proposal, DVC and its joint venture partner (either BHEL or CIL) will hold 26 per cent each and a consortium of financial institutions led by either REC or PFC will be offered the residual 48 per cent.

Discussions on

Both REC and BHEL confirmed some early discussions in regard to the setting up of the Ragunathpur project in joint venture.

“We have also entered into an MoU with DVC in this regard,” a senior REC official told Business Line.

Mr P. Ravi Kumar, Chairman of BHEL said, “We are ready to be an equity partner in Raghunathpur project with DVC.”

He, however, added that DVC was yet to place any formal proposal in this regard.

“If finalised, Raghunathpur will host the first 800 MW unit manufactured by BHEL,” a DVC official said. “Apart from sharing the financial responsibilities, we also propose to share the technological risks of setting up the 800 MW units through joint venture with the equipment supplier,” he added.

On the Kodarma plant, the source said the Union Government had already listed the proposed project as part of its initiative to introduce super critical technology in the State power utilities.

Global tender

Accordingly, NTPC, under the supervision of Central Electricity Authority, is preparing to float a global tender to identify suitable 660 MW technologies for all such projects identified by the Centre.

“As technology is no longer a concern for Kodarma, we are, therefore, taking steps to ensure supply of coal – through joint venture with CIL – as well as raising the requisite finance for the same,” the DVC source said. Sources in CIL also confirmed discussions with DVC in this regard.