Tamil Nadu hopes to save Rs.900 crore in Udangudi project

The Tamil Nadu government’s decision to have the state electricity board implement the 1,600 MW power project at Udangudi in Tuticorin district would result in saving Rs.900 crore, according to a senior official.

“The project will get the mega power status if implemented by Tamil Nadu Electricity Board (TNEB) which in turn would be eligible for tax and other concessions. The overall project cost may come down by Rs.900 crore which in turn would result reducing the power cost,” the Tamil Nadu Generation and Distribution Corporation (Tangedco) official told IANS.

Tangedco is the power generation and distribution subsidiary of TNEB.

The project was to be implemented through a joint venture, Udangudi Power Corporation, with Bharat Heavy Electricals Ltd (BHEL).

The official, who did not want to be named, said the formal cancellation of the joint venture will be made in due course of time and the EPC (engineering, procurement and construction) tender for the project will be issued.

Chief Minister J. Jayalalithaa took the industry by surprise announcing cancellation of the joint venture (Udangudi Power Corporation) between TNEB and BHEL, citing lack of progress in the Rs.8,000 crore Udangudi power project.

The state government would fully fund the project, she said, adding that it would be executed by TNEB as a state project with imported coal as it is yet to get the domestic coal linkage and environmental clearance.

The state government’s decision meanwhile has made other power equipment makers to take a shot at the project now.

As a 26 percent stakeholder in Udangudi Power, BHEL was assured of the equipment order and it had already submitted the technical specification and commercial offer for the two units of 800 MW capacity.

“Now we are one of the potential contenders and we are interested in the project,” Itaru Ishibashi, managing director, Toshiba JSW Turbine & Generator, told IANS.

“We will surely bid for the project if there is an opportunity. We are yet to know the full import of the state government’s decision,” a senior official of another power equipment manufacturer not wanting to named said.

“The state government’s decision is a boon for the private power equipment makers as they can now take a shot at the project and BHEL will have to fight it out for the order,” said S. Karthik, assistant vice president, Unifi Capita.

According to him, power equipment manufacturers having EPC capabilities like BHEL, BGR Energy and Larsen and Toubro will be competing for the project.