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dam-l URGENT -News Item on Loan



 Indian Express, Vadodara (Baroda)
26 Oct. 1998
>
>Rs. 850 -Crore Loan for Narmada Power Project
>
>Bashir Pathan
>Gandhinagar, Oct. 25
>
>In a major breakthrough, the Sumitomo Corporation of Japan has
>sanctioned a credit loan worth 26,500 million Japanese Yen (about Rs.
>850 crore : 1 crore = 10 million) to the Sardar Sarovar Narmada Nigam
>Ltd. (SSNNL) for setting up a 1200 MW hydro power project at the
>Narmada dam site.
>
>This will enable the SSNNL to receive the much awaited six turbine
>generator (TG) sets from the Sumitomo Corporation for the ambitious
>Narmada hydro complex. Each of the TG units will have a generating
>capacity of 200 MWs.
>
>Highly placed sources told the Indian Express here on Sunday that the
>first consignment comprising of two TG sets was expected to arrive from
>Japan sometime in December. With the loan sanctioned, work on the power
>house is expected to begin soon and the project is expected to be
>commissioned in the next two and a half years.
>
>The sources said that besides granting the credit loan, the Japanese
>firm had decided to waive the sum of Rs. 150 crores towards interest and
>demurrage charges on the turbine generator sets lying with the firm.
>
>The Gujarat Government has agreed to provide guarantee for the Japanese
>loan, while the formality of providing a counter-guarantee from the
>Government of India for the same purpose is expected to be completed
>soon, the sources said.
>
>Incidently, the power plant will not benefit Gujarat alone; the home
>state will receive 16 % of the  electricity generated, while Madhya
>Pradesh and Maharashtra will receive 57 per cent and 27 percent
>respectively.
>
>The contract to supply the TG sets had been awarded to Sumitomo by the
>State Narmada Ministry in 1986. The fund was to be financed by the
>Overseas Economic Corporation Fund (OECF)  of Japan as per the agreement
>reached between the latter and the Govt. of India.
>
>However, import of the sets was delayed as the foreign exchange could
>not be raised in time; the sets had been lying in Japan  since then. To
>resolve the issue, the Government of India had constituted a negotiating
>team comprising  representatives from the Centre and the Governments of
>the participating states, Madhya Pradesh, Maharashtra and Gujarat.
>
>After several rounds of talks, the Sumitomo Corporation of Japan agreed
>to grant the credit loan to the SSNNL.
>
>To carry out the work on Narmada hydro project, the Gujarat Government
>has already provided an outlay of 96.10  (sic) crores in its annual plan
>for 1998-99. Of this, an outlay of Rs. 20 crore is provided under the
>State Plan, while the balance will be met from the SSNNL's own
>resources.