Chairman and managing director Reena Ramchandran, said that BSES, Engineers India (EIL), Uhde, Dalal Engineering, Thermax and other companies are keen on providing the system. The company will select one of them as consultant to help choose the final bidder. It will float bids by March next year and complete the installation process within a year.

Ramchandran said that Hindustan Organic will go in for generation of 10mw, going up to 20mw and finally 25mw. The Rasayani plant with a capacity of 2,25,000 tonnes gets 17mw from the Maharashtra State Electricity Board (MSEB) grid. The company has installed a co-generation plant with a capacity of 2mw.

Ramchandran said that additional power would be requiredin view of the Rs 400-crore diphynel dymethane isocynite (MDI) project with a capacity of 20,000 tonnes at Rasayani. Hindustan Organic has incorporated a joint venture company, HOC-Chematur to implement this project which will comence production by November 2000.

At present, the company purchases power from MSEB at Rs 4.25 per unit and has to spend Rs 36 crore annually on purchasing power. It hopes to save Rs 10 crore annually with the proposed captive power plant. It is also keen on installing a turbine with an in-built facility of shifting from one fuel to another. The diesel set will not have such flexible features.

Initially, the company plans to use naphtha as fuel and in the later phase shift to LNG. the company is optimistic to get the required LNG from the Enron pipeline likely to pass from that area. Such a turbine will have a heat recovery system and the steam generated will be used in the processing plants.

With this, the company hopes that the per mega watt cost will range between Rs 2.50crore and Rs 3 crore. "There will be a reduction of at least Re 1 in the per unit cost," Ramchandran said.

She said the company has emphasised on use of non-conventional energy especially solar heating systems. Ten solar water heaters have been provided at places where use of steam or electrical heating was found to be expensive and uneconomical.

INSIGHT

-- move will be welcome

With the company sinking into the red, the cost savings from the captive power plant will be quite welcome. The savings on account of power will be close to Rs 10 crore if the captive generation is 10mw, which is more than the company's loss of Rs 5.08 crore.

But the major problem for the company is the high interest and depreciation burden. Unless it improves its precarious financial situation, it will find that the power cost savings will not help much. Last year, interest on fixed loans had risen by around Rs 18 crore and there was increase in depreciation expenditure by Rs 7 crore. Along with this, loans toloss making subsidary Hindustan Fluorocarbons (HFC) had increased from that of last year. As per the latest balance sheet, Rs 33.52 crore are due from HFC alone.