India's BHEL, state firm plan new power plant

Bharat Heavy Electricals Ltd (BHEL.BO) has signed a memorandum of understanding to form a joint venture with Maharashtra State Power Generation Co to build a 1,320 megawatt thermal power plant, the utility said in a statement on Thursday.

The MoU has a provision that the parties may instead opt for a gas-based 1,500 MW power plant if coal is not available but gas is.

Bharat Heavy's chairman and managing director, K. Ravi Kumar, said the coal-based project would cost about 58 million rupees ($1.2 million) per MW, excluding the cost of mining, while it would cost 42 million rupees ($0.9 million) per MW in the case of a gas-based plant.

"We are applying for a coal mine," Ravi Kumar told reporters adding the venture was looking in Chattisgarh or Mahanadi.

The company would need 5 million tonnes per annum of coal or 6 million metric standard cubic metres a day of gas, he said.

Ravi Kumar said it has applied to Gail (GAIL.BO) to assess the technical feasibility of receiving gas from the Krishna Godavari basin.

The two parties would initially have equal stakes in the joint venture and would later reduce their stakes to 26 percent each with the rest to be sold to financial institutions, banks and other partners.

He said a lot of people were interested, including State Bank of India (SBI.BO), Infrastructure Development Finance Co (IDFC.BO) and IFCI (IFCI.BO). ($1=48.36 rupees) (Reporting by Ami Shah; Editing by Greg Mahlich)

ref:
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSBOM51943020090812