Disclosing this to newsmen, a senior Tamil Nadu Industrial Development Corporation Ltd (Tidco) official said the real average tariff quoted by RIL-consortium was the lowest at Rs 1.06 per kwh.

RIL pipped others consortia like Larsen & Toubro Ltd and the Indonesian firm PT Wismakarya Prasettya Ltd to win the letter of intent (LOI) from Tidco. The L&T-led consortium had quoted a RAT of Rs 1.30 per unit while PT Wismakarya's quote worked out to Rs 1.69 per unit. The developers have a concession of 30 years for operating the project on BOOM (build, own, operate and maintain) basis.

The power component of the Jayamkondam integrated project has an earmarked capacity of 500 mw, which will require 3.5 to 3.75 million tonnes of lignite per annum.

According to the Tidco official, the RIL-led consortium includes the American miningmajor North American Coal Corporation, Foster Wheeler Corporation of the US and Consolidated Electric Power Asia (CEPA), a subsidiary of Southern Energy of the US.

RIL will be given the mining rights on lease basis for 30 years. Tidco has already identified a total of 5697 hectares of land out of which 4059.75 ha will be used in the first phase of the project. Close to 1,300 ha of land has been already acquired.

According to Tidco officials, the remaining part of the land will be acquired within the next three or four months.

The project envisages a stage two of 500mw power generation and also a stage three of another 500mw to take the total capacity to 1,500 mw at the end of 12 years or so.

The officials indicated that land acquisition costs by Tidco will be reimbursed by the RIL consortium at a premium and the cost has been factored into the tariff quoted by them.

After acceptance by RIL of the LOI, Tidco will assist the consortium in conducting the negotiations with the Tamil Nadu ElectricityBoard (TNEB) for a power purchase agreement (PPA). Once this is initialled, the developers will proceed for signing an implementation agreement and financial closure of the project.

It is said that the consortium can make the project operational within 42 months of the financial closure date. They will be given 60 days after the preliminary discussions and initialling of PPA and signing of implementation agreement to proceed for financial closure.

If there is any delay in getting the project off the ground because of delays in financial closure, Tidco has the right to invite the next consortium which has offered the second lowest real average tariff.

Besides providing the state government guarantee, the Jayamkondam project developers are being offered an escrow mechanism guarantee as well in order to secure payments from the TNEB.

The original company which was formed to execute the project - Jayamkondam Lignite Power Corporation Ltd - has been dissolved. The RIL consortium will be wholly in charge ofthe implementation of the integrated project. Tidco will not be having any stake in this project.