Saturday, July 22, 2006

Anil sir – don’t mind but I doubt your project implementation skills

Anil Ambani has matched Mukesh Ambani project by project at least in terms of size and announcement since the demerger. But we need to see whether any of these projects would see the light of the day.

Dadri project – ADAG group plans to make one of the biggest gas based power project in Dadri in Uttar Pradesh near New Delhi. The project is expected to generate 3740 MW of energy is estimated to cost in excess of Rs. 10,000 crores. However with current gas prices ruling at around $ 6 mmtpu, long term sustainability of any gas based power project is under question. Secondly the plant is expected to start production in 2009. To achieve that feedstock (gas) source need to be finalized and pipeline need to be built to transport it from well head to the plant. However no work on the pipeline had began and pipeline would take at least 3-6 years to build. Mr. Anil Ambani, can you please explain how you plan to run the plant in the intermediate period?

Secondly to transport gas from well head in Krishna Godavari basin to Dadri it would cost at least $1 per mmtpu. Why not build a gas based power plant near the well head itself. There is no dearth of demand for electricity in that area.

Hirma project – And if one project was not enough, he has made another mega announcement. He plant to build 12000 MW coal based power plant at a cost of Rs. 60,000 crores in Hirma Orrisa. In fact the undivided Reliance group had plans of coal based power project at Hirma but later it was shelved. ADAG has just revived the old project and made it even grander. BSES’s (now Reliance Energy) electricity distribution companies in Orrisa are already in shambles. Again in this project feedstock would be under question and we need to watch whether he can manage long term contract for coal for the plant with the Orrisa government.

ADAG group’s new punchline is ‘Think Bigger, Think Better.’ Mr. Anil Ambani you surely are thinking bigger but I doubt you are thinking better. You need to be more creative with your ideas. You also need to Think ahead in terms of alternative ways to meet the electricity deficit. And as mentioned in my blogs earlier distribution is the key and not generation.

And soon you would realize thinking is not the end. You need to think bigger and think better but at the same time you need to implement it. I doubt you capability to implement it. I hope you prove me wrong.

2 comments:

Anonymous said...

Why is your articles so Anti-Anil in nature .. is this because of your association with Mukesh ...

A neutral approach is warranted.

Rest .. it is always good to read you.

Anonymous said...

You are right Neeraj about Mr. Anil Ambani's implementation abilities. It is one thing to think on paper and another to do it on the ground. I worked for one of his companies around July 2006 and could not continue since nothing was happening. There were great plans of creating projects in Hyderabad and elsewhere but they remained on paper for at least 6 months after which I quit.