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RIL starts talks for power units

With the non-compete agreement with estranged brother Anil behind him, Mukesh Ambani is marking his first step to fan out into power generation. RIL has begun official discussions with PFC to firm up its plans to set up Ultra Mega Power Projects. Anupama Airy reports.

business Updated: Jul 22, 2010 23:36 IST
Anupama Airy

With the non-compete agreement with estranged brother Anil behind him, Mukesh Ambani is marking his first step to fan out into power generation.

Reliance Industries Ltd (RIL) has begun official discussions with Power Finance Corporation (PFC) to firm up its plans to set up Ultra Mega Power Projects (UMPPs).

The UMPPs, which are awarded by the government and offered special concessions in equipment import and fuel, are part of the country’s ambitious plans to build power generation capacity. “They (RIL) have come and met me and expressed interest in setting up of UMPPs,” confirmed the chairman and managing director of PFC, Satnam Singh. “RIL is not keen on any particular UMPP but are evaluating all the 12 awaiting to be awarded.”

An RIL spokesperson declined comment.

Big push forward

1. The UMPPs, which are awarded by the government and offered special concessions in equipment import and fuel, are part of the country’s ambitious plans to build power generation capacity.

2. The talks with PFC mark the first official confirmation of RIL’s plans to set up UMPPs, each of which will cost Rs 16,000 crore.

3. PFC, the nodal agency designated by the government for UMPPs, has so far awarded four such projects of 4,000 mw each.

4. Bids for two of 12 more planned UMPPs have already been floated.

RIL’s entry into coal-based generation was announced by chairman, Mukesh Ambani at the company’s annual general meeting (AGM) on June 18 after the scrapping of the non-compete pact with Anil Ambani which also roughly coincided with the Supreme Court verdict on RIL’s supply of gas to Anil-controlled power plants.

The talks with PFC mark the first official confirmation of RIL’s plans to set up UMPPs, each of which will cost Rs 16,000 crore.
PFC, the nodal agency designated by the government for UMPPs, has so far awarded four such projects of 4,000 mw each.

These includes three domestic-coal based UMPPs at Sasan (MP), Krishnapatnam (AP) and Tilaya (Jharkhand) and one based on imported coal at Mundra (in Gujarat).

Younger brother Anil has already bagged the development of three UMPPs at Sasan, Krishnapatnam and Tilaya.

Bids (request for qualification) for two UMPPs including one each in Orissa and Chattisgarh have already been floated.

However, Singh said that there were some problems related to coal mining with the ministry of environment and forests in both the projects due to which the process is getting delayed. “Discussions on these issues are going on at the highest level.”

The other UMPPs in the pipeline include two in Tamil Nadu, two more in Orissa and Andhra Pradesh, another one in Gujarat and one each in Maharashtra and Karnataka.

On its plans in the power sector, Mukesh Ambani had announced at the company’s annual general meeting of shareholders, “RIL is drawing up specific plans for mega-investment in this sector with clean coal-based power generation projects, hydel projects and also in nuclear power as and when it is opened up.”