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The Monnet Group is giving a re-look to its power business amid uncertainties in the sector.
An earlier target to establish 3,000 MW capacities by 2017 now seems tough as clearances did not come on time and uncertainty over a coal block, said Sandeep Jajodia, Chairman and Managing Director of Monnet Group.
“We have been slow because the environment in the power sector has changed considerable since we made the announcement,” he told Business Line .
“We are not in a hurry now. Power business is not as interesting as it was supposed to be or imagined few years ago. There are issues and many of them needs to be sorted out by Government,” he said explaining the scenario.
The group with interests in steel, iron ore, coal and power, is focussing on commissioning the projects under execution first rather than going for new ones.
Jajodia said with the current power situation, there is so much negativity in business environment. “One doesn’t know if it’s prudent to put more money in the power sector. So, one will have to wait and see,”
Now, Monnet targets to commission 1,050 MW project at Angul in Odisha by third quarter of 2013-14. Earlier, the power plant attached to Mandakini coal block, was expected to be commissioned by December 2012.
“The project is delayed because Odisha Government could not acquire the land and give it to us on time. We couldn’t start work,” the Chairman said, adding, “We do not see any cost over run because the zero date of the project got shifted.”
The Mandakini coal block has been offered stage-I forest clearance. Monnet is trying to put the block on-stream, which would offer fuel to Angul power plant. The company proposes to start mining and operationalise the power station simultaneously.
In case, it doesn’t happen, we will have to resort to buy from e-auction or source partly from the Indonesian mine, Jajodia said. In 2011, the group acquired a coal mine in Sumatra in Indonesia, for $24 million.
After commissioning of the 1,050 MW, Monnet would explore setting up of another 660 MW in the same complex, which will take the total installed capacity in Angul to 1,710 MW.
Power plants
Monnet is also not pursuing its earlier plans to set up power plants in the East Coast which could be fired by imported coal.
“After we acquired the Indonesian coal mine, we had considered setting up a power plant in East coast. Now, the rupee has depreciated and also merchant tariffs have come down. I do not think it’s commercially viable anymore,” Jajodia said.
Monnet also acquired Orissa Sponge Iron and Steel, which was allotted a captive mine - New Patrapara. The company targeted to set up a 1,200-MW plant based on coal from New Patrapara mine. But, recently the Coal Ministry de-allocated the New Patrapara mine.
“We thought that we would establish a 1,200 MW plant based on that coal, taking total installed capacity of the company to almost 3,000 MW. But currently, the coal block has come into question,” Jajodia said.
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