Tata Power is zeroing in on a site near Singrauli in Uttar Pradesh for setting up a 1,000 Mw thermal power plant. It will shortly decide the location for setting up a 1,000 Mw gas-based generation unit in north India.
The company has shortlisted Delhi, Jhajjar in Haryana and a site between Ghaziabad and Bulundshahar in UP for the proposed gas-based project.
"We want to create an island in Delhi on the lines of Mumbai and would ideally want the unit in the Capital but decisions in Delhi take a long time and in such a situation we would have to shift to a neighbouring state," a Tata group source told Business Standard.
Tata Power has a joint venture with the Delhi government -- North Delhi Power Ltd -- for electricity distribution. The company posted a net profit of Rs 22.53 crore (Rs 225.3 million) on a turnover of Rs 1,268 crore (Rs 12.68 billion) in 2003-04.
Sources, however, did not disclose the investment details for the two proposed plants. Power equipment manufacturers estimated the investment to be over Rs 6,000 crore (Rs 60.00 billion).
Tata Power is expecting concessions from the UP government on the lines of the package of benefits extended to Reliance Energy, which is setting up a 3,700 Mw combined cycle plant at an estimated cost of Rs 10,000 crore (Rs 100 billion)
The company is not very keen on setting up the plant in Jhajjar because of problems with water supply. "If the problem is sorted out quickly we will invest in Haryana," source said. The company has already sought land from the Delhi government for the proposed gas-based plant.
Tata Power is planning to invest around Rs 6,200 crore (Rs 62 billion) over the next five years and is also looking to raise $500 million in the international market to part finance the programme.
A major share of the investments, amounting to Rs 1,628 crore (Rs 16.28 billion) is expected to go into construction of a 330 Mw hydroelectricity plant at Shrinagar in Uttaranchal.
It's 120 Mw Jojobera unit is expected to be complete by October 2005. The company already has a 307 Mw unit in Jojobera.
