NLC, TNEB in talks for power project

Chennai: Neyveli Lignite Corporation (NLC) and the Tamil Nadu Electricity Board (TNEB) are in talks to promote a joint venture (JV) company for a 500-mw thermal power project in Tuticorin.

Industry sources say the talks are the initials stage, and the JV structure - equity holding, management control and other issues - are yet to be finalised.

This is the first time that the TNEB is looking at a JV for power generation. The reason is simple - cash crunch - and NLC is cash-rich. Given the fact that the creation of a per-mw capacity will cost Rs 4 crore, the proposed project will involve an outlay of Rs 2,000 crore.

The TNEB wants to utilise the vacant space near its existing power plant in Tuticorin to house a 500-mw project. The board has already created infrastructure linkages for coal imports. The critical issue that has to be sorted out about the proposed project is the modality of disposing ash.

As the TNEB and NLC are both government organisations and require necessary clearances from respective governments, it will take some time to finalise the JV structure.