Indian Oil Corporation (IOC) has decided to call off its joint venture (JV) with Tata Power for setting up a 1,000 mega watt (mw), Rs 4,000 crore coal-based captive power project at its Paradip refinery complex in Orissa.
A joint venture agreement to execute the project was signed between IOC and Tata Power in December 2008 and the two had decided to form a new joint venture company for executing this project by 2012.
But according to company sources, IOC’s decision to scrap its ties with Tata Power follows a conflict of interest, as the latter is also setting up another 1,000 mw power project in the same location.
A Tata Power spokesperson refused to comment on the issue.
Details of the project as put by IOC for its board, a copy of which is available with Hindustan Times, revealed that despite delays in the project planning and pre-commissioning activities, IOC was still keen to continue its JV with TPC.
In an August 31 meeting, IOC informed its board that despite delays it still explored the prospects of continuing its JV with Tata Power for setting up of the power project, the latter did not indicate interest to pursue the project.
“This is because they (Tata Power) have significantly progressed on their own toward implementation of 1,000 mw coal-based power project…in the same location and a separate power project by JV within the vicinity would have resulted in a conflict of interest,” the IOC board note said.
IOC has now decided to go alone and implement the project as a liquid fuel based captive project to power its upcoming 15 million tonnes per annum mega refinery project at Paradip by March 2012.
“The project was getting delayed and this could have affected the commissioning of our Paradip refinery project,” IOC director (business development) BM Bansal told HT.