Cogentrix - the US-based power company - decided to pullout from the project due to the long delay in getting the required permissions for the project. While the power company was being wooed back, it was said that PowerGen and other foreign companies may also follow the Congentrix' example.

PowerGen India, in a statement, clarified that it continues to be committed to developing the Indian power sector. Commenting on the recent reports regarding the possible pullout, PowerGen India general manager Gerry Grove-White said: "We are a long-term player and extremely committed to India. Though there has been disappointment over the progress of projects in some states over the award of escrow, we remain committed to all our investments and, along with our partners, will continue to develop our business in India. But, we also understand the limitations of financial institutions and banks who will not fund projects without escrow cover." The Indian arm of the UK company which started Indian operations in 1993 has already acquired the status of a leading player in developing independent power projects and has several projects in the pipeline.

Currently PowerGen has equity in projects adding up to 2,000 mw of generating capacity, with a total investment of approximately Rs 1,400 crore in the country. In addition, the company is also actively bidding for various new projects across the country, said the company release.

PowerGen also gets the credit for developing the first IPP in the country without a counter guarantee. The company was one of the promoters of the 655-mw power plant set up by Gujarat Torrent Energy Corporation (Gtec). PowerGen now holds 74 per cent in the power company, since it has bought the entire 46-per cent stake held by Torrent, the other main promoter of the project. The project was commissioned over two years ago and has been operating in full capacity since then. PowerGen has proposed to set up a 578-mw power plant at Bina in Madhya Pradesh jointly with the AV Birla group. While PowerGen will hold 49 per cent stake in the proposed project, the balance will be with the Birla's. According to the company, the project is in an advanced stage of financial closure and it expects to complete all formalities in around three months of the award of escrow.

The company has also stated that around 70 per cent of the project requirement will be sources from local suppliers, including Bharat Heavy Electricals Ltd (Bhel). Other projects proposed by the company include the 567-mw Rosa Power project in Uttar Pradesh (also with the AV Birla group), and the 525 mw Tuticorin power plant in Tamil Nadu.