Neyveli Lignite Corporation (NLC) will go ahead with the Jayamkondam lignite mine-cum-power project in Tamil Nadu on its own, rather than jointly with the Tamil Nadu Electricity Board (TNEB) as was proposed earlier.

Phase I of the Jayamkondam project envisages a mine of about 9 million tpa and a 1,000 MW power project at an initial investment of about Rs.6,000 crore. The power plant will be expanded to 2,000 MW in Phase II, at an outlay of Rs.5,000 crore. Jayamkondam is located 240 km south-west of Chennai.

Forming a joint venture company is not advisable as it would face many a bottlenecks in obtaining the various requisite clearances. It also involved issues like corporate guarantees. If NLC implements the project on its own, it would face no hurdles in raising funds or executing the project. The Jayamkondam project was initially proposed by NLC and was handed over to the private sector in the early 1990s. NLC will prepare a feasibility report for this project and hopes to get all the clearances in a year. Power from this project will be sold to all the southern states, with Tamil Nadu getting almost 75 per cent of the power generated.

In another development, NLC would sign an agreement with the TNEB on 9 June 2005 for setting up a joint venture company to put up a 1,000-MW coal-based power project in Tuticorin. NLC will hold 89 per cent of the equity and TNEB the rest. The cost is likely to be Rs 4,000 crore and NLC has the option of using either domestic coal from Mahanadi Coalfields Ltd, with which it is setting up a power project in Orissa, or imported coal or a mix of domestic and imported coal.