Hyderabad: Hyderabad-based infrastructure company Navayuga Engineering Co. Ltd (NEC) with annual sales of Rs3,500 crore plans to have an undisclosed Indonesian coal mine owner as partner for its proposed 1,300MW Krishnapatnam power project.
The unlisted NEC is the developer of the country’s largest privately owned seaport at Krishnapatnam in Nellore district of Andhra Pradesh, about 150km north of Chennai. The power project, which will use imported coal, would be set up adjacent to the port, chairman Chinta Visweswara Rao said.
While NEC plans to partner with a coal mine owner for the project that would cost around Rs6,500 crore, its strategy is in contrast with several other players in the sector who are acquiring mines abroad.
Rising coal prices and availability of the commodity have become a challenge for coal-based projects. Companies such as GVK Power and Infrastructure Ltd, GMR Infrastructure Ltd and Lanco Infratech Ltd plan to acquire coal mines abroad, while Madhucon Projects Ltd, another Hyderabad-based firm, has already acquired a mine in Indonesia.
“We are talking to an Indonesian coal mine owner who has shown interest in picking up stake in the venture,” Rao said. “We will focus on our areas of strength and while we want to ensure uninterrupted supply of raw material, we don’t want to get into mining.”
NEC says the cargo-handling capacity at the port is being increased to meet the coal import needs of large power projects. Apart from Reliance Power Ltd’s 4,000MW ultra mega power project and Andhra Pradesh Power Generation Corp. Ltd’s 1,600MW super critical project, a few other players have also announced plans to set up power projects near Krishnapatnam.
NEC is executing the first phase of the Krishnapatnam port—with cargo-handling capacity of 20 million tonnes (mt) per annum at an investment of Rs1,200 crore—by June. It plans to enhance the capacity to around 90mt by 2011-12 at an investment of Rs3,700 crore and to 120mt by 2016-17 with another infusion of Rs4,000 crore.
The power sector offers private players huge opportunities with the government’s plan to add 78,577MW of power generation capacity in the 11th Plan period, said Shailesh Kanani, an analyst with broking firm Angel Broking Ltd. Navayuga’s plan “appears a sensible strategy given the substantial time and energies consumed in acquiring overseas coal mines”.
Rao said Navayuga is exploring opportunities to set up coal-based projects along with seaports in neighbouring states. “We have set a target of establishing 5,000MW of power capacity in the next six years,” he added.