MUMBAI, July 20: Gujarat Ambuja Cements has decided to shelve its proposed diversification into the power sector. The company had earlier planned to set up a 500 megawatt thermal power plant in Madhya Pradesh along with US-based utilities major Houston Industries.

The decision comes in the wake of considerable delay in the allotment of coal block to the joint venture company despite protracted discussions between the partners and the union government. It is learnt that the partners' interest in the project has ebbed out.

The joint venture had initially been allotted a coal block at a site unacceptable to the partners, Gujarat Ambuja sources said.

"Several rounds of negotiations have proved fruitless, and we have now decided to shelve the diversification," they said. The project was to have come up in two phases of 250mw each.

The decision to withdraw from the project will enable Gujarat Ambuja to concentrate on cement, its core competence. With an installed capacity of 4.5 million tonnes, it is the country's third largest cement company after ACC and L&T.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.