Group sources said that the assurance was given at a meeting on Saturday between officials of the Tamil Nadu State Electricity Board (TNEB) and independent power producers (IPPs) who had been awarded contracts to put up 20 short-gestation liquid fuel-based projects in the state.

The group will now take steps to initiate a power purchase agreement (PPA) with the state board and soon after approach the Foreign Investment Promotion Board (FIPB) for approval to bring in direct investment, sources said. PT Wismekaria, Polysindo's power arm, had given up the project after a 19-month long wait for fuel linkage, but had decided to revive it since TNEB had agreed to allocate naphtha, the sources said.

Things took a good turn for the foreign investor after the union government announced aliberalised liquid-fuel policy, under which it removed the 12,000mw cap on fuel-linkage for certain fuels other than naphtha. This released as much as 170mw worth of restricted fuel linkage for TNEB from the allocations already made to five short-gestation projects, besides enabling it revive stalled projects worth 695mw. Polysindo sources said that the group had withdrawn its earnest deposits made to the state board when it decided to call the project off, but would now make a re-bid as TNEB had extended the deadline to December 31 this year.

The revival of the Manali project is a consolation for PT Wismekaria, as it recently lost out in the race for putting up an integrated venture to mine three million tonnes-per0annum of lignite and put up a 500mw generation plant at Jayamkondam in Perambalur district. The Indonesian company lost the project mainly owing to the presence of a Chinese partner in its consortium, given the strained relations between the two nations currently, the sources said.Notwithstanding its problems back in Indonesia, the group had said it remained committed to tapping the investment potential in India in general and Tamil Nadu in particular.