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UP revives Rosa power project
PM News Bureau
The Uttar Pradesh government is reviving the long-pending Rs 3,000 crore Rosa Power Project at Shahjahanpur, promoted by the AV Birla Group. "The UP cabinet has cleared the 600 mw project," said Amar Singh, chairman of the Uttar Pradesh Development Council.
This is the second major investment into the state's power sector after Reliance Energy's proposal last year to invest Rs 10,000 crore in a 3,500 mw mega power project at Dadri. Like Anil Ambani, Kumar Mangalam Birla, chairman of the AV Birla group, is a member of the UP Development Council.
Singh also said all clearances have been obtained for Dadri project, and work should begin in "two-three months." He said the state was in "advanced negotiations" with Tata Group to set up a power plant in eastern UP.
The power purchase agreement for the coal-fired 600 mw project has been finalised with the Uttar Pradesh Power Corporation Ltd, and was expected to be finalised once the UP cabinet clearance was granted.
"It is important that PPA, water supply agreement and the revised implementation agreement be signed by both parties before October 31 to enable us to place EPC (engineering, procurement & construction) contract before December 31, 2005, and achieve financial closure of the project by March 31, 2006," says a letter written by Birla to Singh.
The urgency, according to Birla, is driven by pricing pressures. "We have with great persuasion convinced the EPC contractor to hold the price up to December 2005, despite the increase in the input prices such as steel and cement," the letter adds.
The Rosa Power Project, initially a 51:49 joint venture between the AV Birla Group and PowerGen of UK, was initiated in the early 1990s. The earlier estimates had pegged the project's total cost at Rs 2,603 crore with a debt component of Rs 1,814 crore and equity of Rs 789 crore.
[31 October 2005]
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