A Memorandum of Understanding (MoU) was signed between Steel Authority of India Limited (SAIL) and Larsen & Toubro Limited (L&T), to jointly set up, develop, manage and own captive/independent power plant/s at suitable location/s to meet future power requirements of SAIL. The scope of agreement also includes exploration of opportunities to own captive thermal coal blocks to cater to the power plant requirements.
The MoU was signed by Mr. A.K.Jain, ED, Corporate Planning, SAIL and Mr. R.K.Sharma, Vice President and Head (Thermal Project Development), L&T, in the presence of Mr. S.K.Roongta, Chairman, SAIL and Mr. A.M.Naik, CMD, L&T, at SAIL Head Quarters at Delhi today.
The MoU is a precursor to Joint Venture Agreement between SAIL and L&T for the purpose of incorporation of Joint Venture company. Both the parties plan to enter into a JV agreement within three months from the date of signing of MoU. The JV company shall strive to identify/locate potential thermal coal blocks, which will facilitate in identifying a suitable location for the power project. Both the companies shall jointly set up a 1600 MW (2 X 800 MW) green-field coal based captive/independent power plant using super critical technology. The companies will keep the option to further expand capacity by 800 MW/1600 MW at the same or some other location.
The agreement is a significant strategic intervention. The power requirement for the SAIL plants is currently being met primarily through inhouse/captive power plants, including those with JV companies. The balance requirement is met through distribution companies of the respective grids. SAIL's power requirement is likely to increase from the present level of 950 MW, to about 1826 MW by 2010, and 4066 MW by 2020.
Speaking on the occasion, Mr. Roongta remarked that this initiative would be a trend-setter for developing large thermal power plants through Public-Private partnership.
Mr. Naik stated, " A cherished dream of mine for setting up large plants in joint venture with a premier navratna company like SAIL has come true today."
