Lanco’s Dhopave plan awaits intent letter

Lanco Infratech is still awaiting the letter of intent from Maharashtra State Electricity Distribution Company Ltd (MSEDCL) for the Dhopave coastal power plant.

The Hyderabad-based diversified infrastructure player emerged the lowest bidder for the power plant on February 22, 2009, and was to be given the letter of intent (LoI)  by MSEDCL, which has been appointed procurer of power for the plant and is authorised to take decisions.

The more than 70 days’ delay in procuring the LoI has delayed a capacity addition plan of 1600 mw for the power-starved state of Maharashtra.

When Lanco had won the bid, a company spokesperson had told DNA the letter of intent was expected in a week.

“Once we get it, we will take over the land and a special purpose vehicle will be formed to execute the project. After this we will have to pay the bank guarantee, which will be followed by financial closure and fuel linkage,” the spokesperson had said.

The entire process was expected to take three to four months.

Pradeep Lenka, head - power projects, Lanco Infratech, admitted that the company has not been issued the LoI but did not divulge further details.

MSEDCL could not be contacted for comments despite repeated attempts for the last two days.

The Dhopave coastal power plant is a 1600 mw mega power plant to be developed in Guhagar-Dabhol in Ratnagiri district of Maharashtra. The plant will be based on imported coal and is likely to cost around Rs 8,500 crore. The developing company has to also construct a jetty to offload coal imported for the plant.

In February, Lanco had said the company is planning to bring the plant on-stream within 48 months against a target of 54 months.

It will have to develop the project on build, own and operate basis and MahaGenco, the state power generation company, will purchase the power for the procurer - MSEDCL.