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R-Power invires bids for gas-based projects

R-Power invires bids for gas-based projects
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First Published: Fri, Aug 07 2009. 10 16 PM IST
Updated: Fri, Aug 07 2009. 10 16 PM IST
New Delhi: Reliance Power Ltd, a unit of India’s third largest utility, has invited bids for the construction of natural gas-fired electricity projects at Dadri in Uttar Pradesh and Shahpur in Maharashtra.
The total capacity of the projects is 8,000MW, according to a Reliance Power advertisement in The Economic Times newspaper on Friday. Final capacity at each location will be made known during pre-bid discussions, the company said.
The Dadri project is at the centre of a legal battle between India’s billionaire Ambani brothers over the supply of gas from a field off the country’s east coast. Anil Ambani, chairman of Reliance Power (R-Power), has said failure to resolve the dispute has delayed Dadri by at least three years.
R-Power first sought bids in 2005-06 and has resumed the process after the Bombay high court ruled on 15 June that Reliance Industries Ltd, controlled by Mukesh Ambani, must honour a 2005 agreement to supply gas to a company owned by his estranged younger brother Anil. The Supreme Court is scheduled to start its hearing on 1 September.
Anil Ambani is trying to enforce an agreement, signed after the family empire was split in 2005 that requires Reliance Industries to supply 28 million cu. m of gas a day at $2.34 (Rs112) per million British thermal unit (mBtu) for 17 years to his Reliance Natural Resources Ltd. Reliance Industries says the fuel can’t be sold for less than $4.2 per mBtu, a price set by the government in 2007.
The government, which has a production sharing contract with Reliance Industries for the field in the Krishna-Godavari basin in the Bay of Bengal, has said the gas is national property and must be used in accordance with its policy.
The government will allot gas to planned power plants, including Dadri, when they are ready to start production, subject to availability, oil minister Murli Deora said in Parliament on Monday. Allocation of gas will be without prejudice to the verdict in the court cases, he said.
The Dadri power station in Uttar Pradesh state is intended to have capacity of 7,480MW, according to Reliance Power’s annual report for 2008-09.
The 4,000MW Shahpur project, in Maharashtra, has a 2,800MW gas-fired component and 1,200MW capacity based on coal, according to the annual report.
Bid documents will be issued starting 18 August, according to the advertisement.
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First Published: Fri, Aug 07 2009. 10 16 PM IST