EMCO's Indian Power Projects to Utilize Indonesian Coal

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Researched by Industrial Info Resources (Sugar Land, Texas)--EMCO Limited (BOM:504008) (Thane, Maharashtra), one of the largest manufacturers of transformers in India, holds a 37.5% stake in a coal mine in the Kalimantan region of Indonesia with reserves of 105 million tons of coal. The mine was acquired by EMCO with an investment of $18 million and is expected to start production by September this year.

The company has also acquired three power projects in Maharashtra worth $85 million from Maharashtra State Electricity Transmission Company (MSETCL) and has entered into a joint venture with a Calcutta-based steel trading firm to set up a 600-megawatt (MW) power plant in Chhattisgarh. EMCO is exploring possibilities of utilizing the coal from its Indonesian coal mines in its new power plants and is looking for appopriate sites in the country's east-coast region to set up its own 2,200-MW coal based power plant. Until then, the mined coal will be traded.

As part of the $85 million contract from MSECTL, EMCO will design, engineer, build, erect, test and commission three new substations of 400 kilovolts (kV) each with a combined additional power generation capacity of 1,250 MW for the Maharashtra Power Generation Company Limited. The substations are likely to come up at Bhusaval, Khaparkheda (both in northeast Maharashtra) and Chakan (in western Maharashtra). The first phase is expected to be operational in December 2008, the second phase in December 2009, and the third phase in December 2010. In addition to this, EMCO has also won a contract from MSETCL to set up a 220-kV gas insulated substation at Bhandup in Mumbai. Gas insulated substations are of strategic importance in Mumbai because they require less space than traditional substations and are pollution free, requiring comparatively low maintenance.

EMCO's projects have been considerably delayed because of the complications involved in land acquisition of proposed sites and the bureaucratic red tape of environmental clearances, as well as the difficulties in procuring plant equipment. Difficulty in raising funds combined with high interest rates has further deterred the process.

EMCO Limited, which has existed for 43 years, is a leading player in the power transmission and distribution sector in India. It is listed on the Indian Stock Exchanges and is one of the largest producers of electronic energy meters and turnkey electrical substation and transmission line projects up to 765 kV. With an employee base of 1,700 in its seven manufacturing plants in India, the company exports products and services to over 30 countries around the world.

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