NLC plans power plant near Chennai

By Our Special Correspondent

CHENNAI, SEPT. 29. The Neyveli Lignite Corporation Ltd (NLC), a premier Central public sector enterprise (PSE), proposes to set up a 490-MW power plant based on petroleum residue near Chennai at a cost of about Rs. 2,500 crores.

The project, which will be executed as a joint venture with Chennai Petroleum Corporation Ltd (CPCL, formerly Madras Refineries Ltd), will be based on technology from Foster Wheeler Italiana, routed through Engineers India Ltd. (EIL). ``It is a proven technology based on which two power plants are operating in Italy,'' Mr. A. K.Sahay, Chairman and Managing Director of NLC, said here today.

Addressing a press conference to release the annual results of the company for 2000-01, Mr. Sahay said work on the Chennai project would start in about nine months after the required agreements were concluded and it would have a gestation period of three years. The project had been approved by the Central Electricity Authority (CEA) and was expected to produce power at a cost of Rs. 3 per unit.

The CMD said NLC was also talking to the Rajasthan Government to set up an integrated project for lignite mining and power generation. The company, which had initiated a mining project in that State in 1986, had to abandon it following a change in the Central government policy on budgetary support to PSEs after 1991.

Mr. Sahay said the proposed restructuring of the capital of NLC would be implemented after I-Sec submitted its final report. The report was delayed following changes in the policy of the Central Government on taxation of dividend.

He said 2000-01 was ``one of the best years'' for the corporation, with the turnover at Rs. 2,371 crores and profit after tax at Rs. 726 crores against the profit of Rs. 392 crores achieved in the previous year. Power generation (from a total installed capacity of 2,070 MW in two pithead stations) at 14,673 million units was the highest since inception.

The board of directors had declared a dividend at 10 per cent for the year ended March 31, 2001, amounting to Rs. 190.53 crores (including dividend tax) compared to 7 per cent in 1999-2000.

NLC's projects under implementation included the following: (1) expansion of Mine-I capacity to 10.5 million tonnes from 6.5 million tonnes at a cost of Rs. 1,336 crores; (2) expansion of TPS-I to add 2 x 210 MW at a cost of Rs. 1,590 crores; the units were expected to be commissioned in January and May, respectively, next year; (3) Mine I-A, being established to supply lignite to the private sector ST-CMS project of 250 MW, at a cost of Rs. 1,032 crores; The project was on schedule and was expected to be commissioned before the power plant was commissioned in 2002-03.

Once these projects were implemented, the total mining capacity of NLC would reach 24 million tonnes and power generation capacity 2,490 MW.

With a view to meeting additional demand for power, the company was taking advance action to expand Mine-II by 4.5 million tonnes and TPS-II by 500 MW, both being scheduled for completion by the beginning of the Eleventh Plan (2008). Feasibility reports for a new Mine-III with eight million tonnes capacity and TPS-III of 1,000 MW were under preparation.

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