India's largest power plant ahead of schedule

In the scorching heat of the Kutch sun, about 200 workers are busy etching a boundary around a 2,700 acre tract of inhabitable desert land. This land, now owned by the Tata Power Company, will soon house the country's largest power plant of 4,000 Mw.

This will be the first of the ten-odd ultra mega power plants (umpp) to be set up across the country through a public-private-partnership.

Though the workers at the site are ignorant about the dimensions of the project, the contractors and the people in the neighbouring villages know what the buzz is all about. "This is a Tata project. . .and Tata is a very big company," says one local inhabitant.

Most knew about the project even before the boundary wall started coming up in late August. Tata Projects -- a sister concern of Tata Power -- has been given the contract to build the fence.

Tata Power bagged the Rs 20,000 crore (Rs 200 billion) project in Mundra last year by offering to supply electricity at the lowest rate of Rs 2.26 per unit by burning imported coal. It acquired Coastal Gujarat Power Limited (CGPL), a special purpose vehicle (SPV) which housed the Mundra umpp, and merged it with itself in April, making it the first umpp to be transferred to the project developer.

The other umpp which has been transferred to the developer is the Sasan project in Madhya Pradesh, which is based on pithead coal.

Mundra project is progressing on schedule, or rather "ahead of schedule," say company officials. The project would comprise of five super-critical units of 800 Mw each. Though the contractual date for commissioning of these units is from 2013 to 2015, the company is confident of commissioning the first unit within the 11th plan itself (by 2012). Orders for equipment have already been placed with Japan's Toshiba and Korea's Doosan.

The electricity from the Mundra plant would be supplied to Gujarat (1,900 Mw), Maharashtra (800 Mw), Punjab (500 Mw), Haryana (400 Mw) and Rajasthan (400 Mw). Gujarat Distribution Company is the lead procurer on behalf of all procurers.

While such projects typically have to go through the pains of relocating local population, the nature of this land -- infertile and barren -- ensures that "resettle-ment and rehabilitation would be minimal," says a company official.

Just about ten kilometres away from the Tata site, work on another private sector power plant is on at full swing.

The Ahmedabad-based Adani group is all set to put up a 2,640 Mw thermal plant in Mundra which would also run on imported coal. The coal for the Rs 10,000 crore (Rs 100 billion) plant would be imported from Indonesia through Adani port, which is about 25 kilometre from the Mundra project site. Adani Power has also started building another imported coal based project of 1,320 Mw.

All of these projects would collectively disperse over 6,000 Mw of power from the vast spread of uninhabitable desert of Kutch, which would make it a veritable power hub of the west coast.

Adani has tied up with the Chinese equipment company SENEC for setting up the plant on a turnkey basis. According to a senior company official, by October 2008, two units of 660 would be ready for commissioning. And going by what one sees on ground, this claim doesn't look hollow.

"We would beat Tata Power in getting the project commissioned before them", says the official.

Already huge boiler installations have been set up and building material is lying all over the place which has scurrying workers busy in construction. "The Chinese equipment are not only low cost but their delivery time is also less as compared to Indian equipment manufacturers," added the official.

Besides Tata and Adani, Torrent group would be adding over 1,000 Mw of capacity while Gujarat state electricity board would be adding 115 Mw during the 11th Five Year Plan (2007-12). Currently, of 10,781 Mw of installed capacity that the state of Gujarat has, 2,673 has been contributed by the private sector.

The public-private mix of power is however set to change as more private players come to the fore like Tata and Adani Power.