Indiabulls Power - Amravati Site Visit:: Morgan Stanley

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India Discovery: Indiabulls Power - Amravati Site Visit

Key Highlights: We visited the Amravati site, where the
Indiabulls Power is setting up a 1,350 MW (270 MW x
five units) coal-based power plant. Key highlights from
the visit were as follows:

• The construction work is progressing and the
company is running 15 days ahead of its schedule.
The monsoons were heavy this year, which reduced
the lead time by about 45 days.


• The company expects to declare commercial
operations for its first unit on May 2012 and each
subsequent unit is expected in an interval of two
months. As a result, the company expects the entire
plant i to be commercially ready by January 2013.

• The company has 1,350 acres in its possession,
which is sufficient to meet the requirements for both
Phase I and Phase II (another 1,350 MW with
similar configuration as Phase I).

• The equipment order was placed with BHEL in
October 2009, and the company believes supplies
from BHEL are currently on schedule. The company
has stationed 10 senior ex-BHEL employees at
various BHEL locations to monitor the progress on
supply.

• There are 2,100 workers on the site, and that
number is expected to peak at 5,000. Mr. Milind
Deshmukh is the construction in charge, and he has
32 years of experience at L&T and Tata Power (at
the Mundra UMPP site). The CEO (Ranjit Gupta)
and COO (Murali Subramanian) visit the site twice a
month, while Rajiv Rattan visits the site once a
month.


• The company has given out orders to some of the best
contractors in the sector – BTG civil work to Shapoorji
Pallonji, coal-handling plant and electrical balance of plant
(BoP) to L&T, chimney construction to Gammon, BoP civil
work to Ganon Dunkerley, cooling towers to Paharpur,
transformers to Areva, and switchyard to ABB.
• Water allocations are in place from the upper Wardha dam,
which will be adequate to meet requirements for both
Phases I and II.
• The company has received letters of assurances from
WCL and SECL for coal supply. The mines are about
600 km away from the plant site. The company has said it
will appoint a contractor soon to lay down a 22 km-long
railway line to connect to the Walgaon railway station.
• The company will construct a 103 km-long transmission
line to connect the plant to the nearest state and central
sub-station, i.e., Akola.
• The company has signed a PPA with MSEDCL for the
supply of 1,200 MW at a levelized tariff of Rs3.26/unit. The
first supply of 450 MW is slated to start in May 2014, with
the balance 750 MW from June 2014.
• The status on construction on Phase I is as follows:
o Unit #1: The boiler and turbine generator (TG)
foundation work is complete and erection work is
almost done (Exhibit 1).
o Unit #2: The boiler and turbine generator (TG)
foundation work is complete and boiler erection work
has started (Exhibit 2).
o Unit #3: The boiler foundation work is ongoing and is
expected to be handed over to BHEL by November
15.
o Unit #4: Excavation work has been completed for
boiler, TG, and electrostatic precipitators (ESP).
o Unit #5: Excavation work has just started for TG area.
o Construction work on both the chimneys is underway.
The height of each chimney will be 275 meters


• Separately, on the Nashik plant, the company is setting up
a 1,350 MW coal-based plant with a similar configuration
as Amravati. The company expects the first unit by
September 2012, second unit by October 2012, and the
balance of three units in an interval of two months each.
The coal linkage for this plant is from MCL and WCL and
the mines are about 900 km away.
• The company expects the first unit at both Amravati and
Nashik Phase II by May 2013 and each unit thereafter in
an interval of two months each.