Hindujas to energise India power foray

The Hinduja Group plans to renew its thrust into India's power sector with the much delayed Vizag project in India expected to be fully operational by September 2013, senior officials said.

The Vizag project picked up steam in 2008, a decade after it was proposed, but was hampered by regulatory issues since.

The 1040 megawatt (MW) project, being executed by the group's power sector vehicle, Hinduja National Power Corp, is part of a plan to produce 10,000 MW for power hungry India over 5-6 years.

The first phase of the $1.2 billion project comprising one unit of 520 MW will be commissioned by June 2013, Ashok Puri, managing director at Hinduja National Power, told reporters.

The group has already invested 14 billion rupees in the project which sources coal from Mahanadi Coalfields in the neighbouring Orissa state, an unit of Coal India Ltd.

The firm is looking for sites in Maharashtra, Karnataka, Gujarat and Orissa For new projects where it can get "requisite fuel linkages," Puri said.

The Hinduja Group, which has interests across banking, media, power and automobiles in India, remains committed to its 500 billion rupees investment for the country, bulk of which would be power focused, Abin Das, group director, said.

Asia's third-largest economy, where blackouts are common, faces a peak power shortage of 13 percent as rising demand from industry, homes and shopping malls outstrips capacity growth.

India needs to add over 75,000 MW in the five years to March 2017 to support its target of 9 percent GDP growth, according to a government report. That will cost roughly 11 trillion rupees ($210 billion), with half of it to come from the private sector, where investor appetite is weak.

"We are looking at coal blocks coming up for auction. We are also looking at import from Indonesia," Puri said.

Puri said that the company was open to picking up small equity stakes in coal projects overseas to lock in supplies and for trading arrangements.

The Vizag project has tied up 85 percent of its output already through long-term power purchase agreements, Puri said.

The Hinduja Group is also in discussions with the Qatar government for sourcing gas to fire future projects along the eastern coast of India.

However, the gas prices which Qatar offers in India are linked to Japanese crude cocktail, which makes it expensive at the moment.

Das said that the company was in talks with the Qatar government to bring down the cost and also participate in the setting up of terminals in India.

The Hinduja Group gets around 18-20 percent of its revenues from India. The Group has a sizeable presence in the Gulf with Hinduja Bank having a presence in Dubai.