The Hindu : Business : NLC to set up power plant in Orissa

Online edition of India's National Newspaper
Wednesday, Jun 08, 2005

Business

Business

NLC to set up power plant in Orissa

Indrani Dutta

Seeks majority stake in venture with MCL

KOLKATA: Neyveli Lignite Corporation (NLC) is planning to set up a coal-based pithead power plant in Orissa in joint venture with Mahanadi Coalfields Ltd, a subsidiary of Coal India Ltd (CIL) .

CIL sources said both companies (MCL and NLC) had agreed in principle on setting up a 2,000 MW power plant. While MCL had sufficient coal reserves, NLC had the expertise to implement and run power projects, the sources said. For CIL it would be a maiden entry into the power sector marking a forward integration. For NLC it would be the first entry into coal-based thermal power project, the sources said. NLC has about lignite-based power projects with a total capacity of 2,500 MW.

Confirming the development, the NLC Chairman, S. Jayaraman, told The Hindu over phone that a memorandum of understanding was now under preparation. "We would prefer a majority stake (about 74 per cent) in this joint venture, but we are open to dialogues in this respect,'' the NLC chief said.

Mr. Jayaraman said NLC had applied for coal blocks in Orissa some time ago. However, the final allocation fell short of requirements. "The idea of tying up with CIL was then mooted by the Coal Ministry since MCL had adjacent blocks with the requisite reserves,'' he said.

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