Kolkata: In an effort to take advantage of the meltdown in commodity prices, Adani Power Ltd (APL) seems to have renegotiated the cost of critical equipment with the Chinese contractor for its super critical coal-based 1,980-MW (3X660 MW) power project at Tiroda in Gondia district in Maharashtra. The project is being executed by Adani Power Maharashtra, a wholly owned subsidiary of APL.
Though the Adani group declined to comment, industry sources close to the development told Business Line that the company recently renegotiated the Boiler, Turbine and Generator (‘BTG’) package with Sichuan Machinery and Equipment Import and Export Co Ltd.
According to sources, the renegotiated contract may reduce the project cost by up to 10 per cent, which is expected to a reduction of over Rs 800 crore.
Adani Power, a subsidiary of Adani Enterprises, had filed a draft red herring prospectus to raise over Rs 5,600 crore through an IPO. According to the prospectus, the company was allocated two coal blocks at Lohara West and Lohara Extension for Tiroda. The project is expected to be fully commissioned by April 2012.
Though SEBI cleared the proposal in September this year, the IPO plan was postponed in view of market conditions.
Overall, APL proposed to set up six coal-based thermal power projects in Gujarat, Maharashtra and Rajasthan totalling 9,900 MW at an estimated investment of Rs 43,139 crore by 2011-2012.
Of the six projects, the 4,620-MW coal-based Mundra power project is in advanced stage of implementation. Phase-I (660 MW) of the project, including two units of 330 MW, may come on stream in February. Work is also nearing completion for Phase-II (660 MW).
Construction of phase III (2X660 MW) and IV (3X 660 MW) is underway. The entire project is expected to be commissioned latest by 2011.
Mundra power project is located in the Mundra Port and SEZ area, also promoted by Adani Group. The critical equipment for the project is also sourced from Chinese contractors.