India's L&T Secures $178 Million in Contracts to Develop Two Coal-Handling Facilities

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Researched by Industrial Info Resources (Sugar Land, Texas)--Larsen & Toubro Limited (BSE:500510) (L&T) (Mumbai), a leading engineering and construction firm, recently secured contracts worth a total of $178 million from Neyveli Lignite Corporation Limited (BSE:513683) (Chennai, Tamil Nadu) and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) (Lucknow, Uttar Pradesh) for developing coal-handling plants at Tuticorin in Tamil Nadu and Anpara in Uttar Pradesh, respectively. The contract awarded by Neyveli Lignite is worth about $102 million, while that awarded by UPRVUNL is valued at about $76 million.

L&T secured the two contracts in the April-June quarter of the current fiscal year. Under the terms, L&T will be responsible for basic and detailed engineering of the plants; civil and structural works; electrical, mechanical and instrumentation works; supply; testing; and commissioning. The Metallurgical Material Handling & Water Operating Company of L&T's Engineering, Construction and Contracts (ECC) division will execute the contracts.

In Tamil Nadu, Neyveli Lignite plans to set up a 1,000-MW thermal power plant at Tuticorin in an 89:11 joint venture with Tamil Nadu Electricity Board (TNEB) (Chennai, Tamil Nadu). The cost of the project is estimated at $1.02 billion. Neyveli Lignite already has signed a Memorandum of Understanding for the project with TNEB, and has secured approval from the central government to commence with preliminary activities for the project.

In May, the Tuticorin Port announced plans to develop coal-handling facilities in the North Cargo berth for Neyveli Lignite with an investment of more than $73 million. The facility will have a capacity of 5 million tons per year, and will handle thermal coal imported from Indonesia for the firm's 1,000-MW power plant in Tuticorin. The power plant also will procure coal from Mahanadi Coalfields Limited (Sambalpur, Orissa), a subsidiary of Coal India Limited (Kolkata, West Bengal). Operations on the power plant and coal-handling facility are expected to begin in mid-2011.

In Uttar Pradesh, UPRVUNL is currently implementing the 1,000-MW Anpara D thermal power project at a cost of $1.08 billion. In late 2007, the firm awarded a $708.61 million contract to Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (Mumbai) for setting up two units of 500 MW each. The facility will be developed over 168 hectares of land. The coal requirement for the project is estimated at 17,563 tons per day, and feedstock will be obtained from the Bina, Dudhichua and Kakari coal mines located about 25 kilometers from the plant site. The project is scheduled for commissioning in 2011-12.

UPRVUNL already operates five coal-fired thermal power units with a combined power-generation capacity of 1,630 MW at the Anpara facility in the Sonebhadra district of Uttar Pradesh. The power plant consists of three units of 210 MW each, supplied by BHEL, and two units of 500 MW each, supplied by Mitsubishi Corporation (TYO:8058) (Tokyo, Japan). Feedstock for the plant is obtained from the open coal mines at Bina, Kakari and Kharia. The 1,200-MW Anpara C thermal power project is being developed by Lanco Infratech Limited (BSE:532778) (Hyderabad, Andhra Pradesh) and is scheduled for completion by the end of 2010. The facility will consist of two units of 600 MW each. The total cost of the project is estimated at $878 million.

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