MPS Steel Castings (P) Ltd. has been waiting for two years for sanction from the State government to start another thermal power plant in Kanjikode, one of 100-MW capacity at the Kinfra Park, said its chairman, M. Paramasivam, here on Saturday.
The estimated investment is Rs. 500 crore. The existing plant has a 10-MW capacity.
Mr. Paramasivam told presspersons here on Saturday that the project was submitted to the government two years ago. The existing plant sold power at Rs. 2.30 a unit to the Kerala State Electricity Board, a rate lower than the Rs. 4.80-4.90 paid for power from other States.
He said Kinfra had allotted 16.4 hectares of land in the park for the new plant. The State Bank of India had agreed in principle to finance the project. Since the proposed plant ran on thermal energy, a stable and constant power output could be guaranteed throughout the year, backing the board in meeting the energy demands of public sector units, such as the one of BEML Ltd., formerly Bharat Earth Movers Ltd., and the railway coach factory, coming up in Kanjikode.
He said that to finalise the repayment schedule and to sanction the loan, the banks needed details of the quantum of power to be generated, selling cost and the power purchase agreement. For that, the company had approached the government, the board and Kerala State Electricity Regulatory Commission. It was under their consideration now. Once the government and the board let know of their decision, the loan would be sanctioned and the project completed in two years.
He said the purchase rate from the existing plant was much lower than the cost of production of Rs. 3.88 a unit, leading to losses. The government should fix the rate above the cost of production for the project to be viable.