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Cogentrix confirms pull-out; China Light seeks Indian partner to complete Mangalore power project

US-based Cogentrix Energy Inc has walked out of a proposed 1,000-megawatt power project in the southern Indian state of Karnataka following years of hurdles and delays, a partner said on Saturday in Bangalore.

But Tom Watters, director of Hong Kong-based China Light and Power International Ltd, which was in partnership with Cogentrix, said his company would implement the project with a new Indian partner.

Watters announced Cogentrix's decision over the $ 1.3-billion project to Karnataka Chief Minister S.M. Krishna. The project is to come up near Mangalore, 300 kilometers (180 miles) away.

"Cogentrix has walked out because they find the atmosphere more conducive in the United States," Watters later told reporters. "They want to execute projects in their own country." He said China Light and Power International would now scout for an Indian partner to finish the project, which was originally conceived in 1994 -- three years after New Delhi launched sweeping economic reforms.

"We will go ahead and complete the project," he said. "A new partner will be shortlisted in 15 days."

Cogentrix last month said it was withdrawing from the project, blaming bureaucratic hassles and legal hurdles. Government officials urged the firm to reconsider its decision.

Cogentrix held a 60 per cent stake and China Light and Power International 40 per cent in their joint venture -- the Mangalore Power Company.

Watters said the Karnataka chief minister had asked him to try reduce the power tariff. "We will try to work out a new rate," he said.

Regulator to have last word on Cogentrix power project

Business

Karnataka