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Kolkata, Dec 18

CESC has entered into a Rs 854-crore turnkey EPC contract with BHEL for building a 250 MW capacity unit at the power utility's existing thermal power station at Budge Budge.

The unit will be set up at an estimated cost of Rs 1,100 crore within 36 months from December 24, 2006, the zero date.

On Monday, CESC Vice-Chairman Mr Sanjiv Goenka exchanged documents on the turnkey jobs with BHEL Director Mr Ravi Kumar.

The EPC package covers supply and installation of major equipment and auxiliary systems for the proposed unit.

Mr Goenka said that the company has placed separate orders with other contractors for the remaining project items, such as switchyard and a 200-m chimney - equivalent to the height of a 70-storey building.

The Budge Budge power station already has an installed capacity of 500 MW (2x250 MW).

The proposed unit is part of the capacity expansion plan of the power plant.

Mr Goenka confirmed that necessary clearance for the third unit, including pollution control and environment clearance and other approvals, had already been obtained.

Mr Kumar said that his company has already installed equipment for over 90,000 MW of power generation.

It currently makes thermal sets in the range of 200-500 MW.In addition to the Budge Budge expansion, Mr Goenka said, CESC has plans to invest about Rs 16,000 crore to set up three new thermal power plants with a combined capacity of 4,000 MW.These plants will be set up at Haldia in West Bengal (2,000 MW), Dumka in Jharkhand (1,000 MW) and Dhenkanal in Orissa (1,000 MW).The Haldia project, which is progressing satisfactorily, would require about 2,000 acres.Mr Goenka expects the Haldia and the Dumka projects to be ready for commissioning within the 11th Plan, while a part of the Dhenkanal project would be completed during the same period.The cost of the projects would be met from internal resources, a public issue and commercial borrowings. The equity-debt ratio of 1:2 would be maintained.CESC is primarily a generating and distribution company, but Mr Goenka said: "I am looking for new distribution centres anywhere and everywhere."Similarly, CESC has plans to close every polluting unit. It was stated that the Budge Budge project had been acclaimed as a successful project under the clean development mechanism of the Kyoto Protocol for reduction of harmful greenhouse gases.

(This article was published in the Business Line print edition dated December 19, 2006)
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