Essar Power was set-up by the Essar group to mitigate power shortage in Gujarat. The plant also provides uninterrupted power (215mw), which is critical to the group's steel manufacturing facility at Hazira.

The combined cycle part of the project was commissioned during 1997-98. The whole plant, comprising three gas turbine generators, three waste heat recovery steam generators, one steam turbine generator and associated systems, went into commercial production from October 1, 1997. During 1998-99, the company also successfully implemented the modification of the combustion system for simultaneous firing of naphtha and natural gas under the supervision if GeneralElectric (GE).

The company said that the growth in turnover and net profit had been achieved despite its plant at Hazira, Gujarat, being affected by natural calamities during the period. Essar Steel, the group flagship, consumes 215mw of power annually while the rest is lifted by the state electricity board. Interest and finance charges paid by the company rose to Rs 274.84 crore, while depreciation jumped to Rs 111.29 crore. The company provided for a tax of Rs 0.41 crore against none last year. Essar Power is slated to be sold to Marathon for a consideration of Rs 720 crore. The US-based oil and power major will also take on Rs 1,550 crore Essar Power's outstanding liabilities on its books.

However, the deal which was expected to be closed by August 31 has got delayed and the Ruias do not expect consummation of the deal till the end of the general elections. The Rs 523.5 crore equity capital is held by Essar Steel (42 per cent), Essar Oil (9 per cent) and Prime Hazira, an investment company of the Ruiasbased in Mauritius.