The acquired land falls within the industrial area promoted by Maharashtra Industrial Development Corporation (MIDC) and is located very close to RIL's petrochemical complex at Patalganga, industry sources said. The exact cost for the transaction could not be ascertained but it could be somewhere in the range of Rs 25-30 crore if the prevailing MIDC rates are anything to go by. The cost for the project is estimated at around Rs 1,700 crore and the financial closure will be completed by the end of the year. Since the project has to be completed with in 24 to 30 months after the financial closure, the commissioning will take place in 2003. The fuel for the project will be either naphtha or natural gas.

Industry sources said that with the demand supply deficit in the power sector in the country is estimated at around 1,00,000 mw, RIL will be aiming at a target of 10,000 mw in the next 10 years. If it manages to gain a controlling stake in BSES its power capacity will go up to 8,000 mw. BSES has a total power capacity of 2,000 mw. RIL has a captive power generation capacity of around 800 mw from its plants located at Naroda, Patalganga, Hazira and Jamnagar.

With the state governments opening up the power sector, RIL has started developing various power projects in Tamil Nadu, Gujarat and Maharashtra. u It has recently signed an agreement with Southern Energy Asia-Pacific Ltd to jointly develop a coal-based thermal power project at Hirma, Orissa.

Analysts said that power trading and derivatives market will become a major attraction for Indian power companies in the near future. It is learnt that RIL has also chalked out plans to make a major foray into the trading arena and the move to hike stake in BSES was part of this strategy.