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Home News Power Sector News Economic Meltdown - Tata Power not looking at large projects

Economic Meltdown - Tata Power not looking at large projects

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Tata Power"In the current financial scenario, it is difficult to raise resources (around Rs200bn) needed for each plant," says Executive Director Banmali Agrawala, Tata Power Ltd. may not bid for the upcoming ultra mega power projects (UMPPs), as raising funds for setting up such large projects is quite tough given the global financial meltdown.

"We are not bidding because in the current financial scenario, it is difficult to raise resources of around (Rs200bn) needed for each plant," Tata Power Executive Director Banmali Agrawala told reporters on the sidelines of a news conference in Mumbai.

The company recently withdrew from the bidding process for a 4,000-megawatt project at Tilaiya in Jharkhand. Tata Power, which is India's largest private sector power utility, is currently in the process of building a UMPP at Mundra in Gujarat at a cost of Rs170bn (US$3.4bn).

The Tilaiya project eventually went to Reliance Power, part of the Anil Dhirubhai Ambani Group (ADAG). This was the third time that Reliance Power had won a bid for a UMPP. It already has bagged two UMPPs at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.

The Government plans to add 78,000 MW in generation capacity by 2012. The country, which faces a peak power shortage of 16%, plans to build nine UMPPs, with generation capacity of 4,000 MW apiece.

"The threshold for returns on capital is a little bit higher now. We have become more selective on what projects we do,"

Agrawala said. "We still have about 6,000 MW under construction, and we will focus on completing that," he said. Tata Power currently generates 2,300 MW of electricity.

Source - India Infoline News Service

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