Reliance Power’s AP plant to start generating power by year end: Lalit Jalan, Reliance Infrastructure

Reliance Infrastructure bagged an engineering procurement and constrcution order worth Rs 7,200 cr from Reliance power for 2,400 megawatt, gas fuelled power plant. Reliance Infrastructure CEO, Mr Lalit Jalan, in an interview with ET Now, gives us a perspective on the company and what this order boost is likely to do to the revenues.

Can you give us an indication of how much advance Reliance Infra got from the order and the timeline of how much the balance of funding will be completed?

This project is the largest gas based power project in India, the contract value being Rs 7,200 crore. With this total order book increases by almost 25% and is now at Rs 30,700 crore, which makes us one of the leading EPC players in the country. The project is expected to start generating power by the end of this year and all the gas turbines will be in operation by March 2012. So, it has been on a fast schedule. All the orders for gas turbines, steam turbines, HRSGs, GIS everything has been placed.

You have indicated the project would be done by March 2012. Could you give us the indication regarding the construction activity. What is the progress like there? When does it start off for the project? Have all the mandatory approvals been taken or you have got still some time gap before you start?

The project is already under full swing construction. There are thousands of people on the site and the supplies of the critical parts are commencing and the project will start generating power by the end of the year which is nine months from now. It is on very rapid schedule and all the necessary clearances are available.

From the financial aspect of it when does this start contributing on the books?

It will start contributing from current quarter itself.

How much of an uptick would you expect? A ballpark estimate.

This is a very rapidly executable project so the entire revenue of Rs 7,200 crore from this project will reflect by the end of the next financial year. So if we say that the project is completed by March ‘12, by March ‘13 the entire revenue of Rs 7,200 crore will reflect as EPC revenues for the company.

Has Reliance Power secured gas for this power plant? Also, if you could give us an update of the transfer of the 433 megawatts of operational assets of Reliance Infra to Reliance Power?

The transfer is in process, that is, of the other assets from Reliance Infra to Reliance Power. Regarding gas that is a question you should ask Reliance Power, we are a contractor as far as we are concerned.