Voice of Electricity Workers April-June 2002 Index
FINANCIAL CLOSURE OF 12 INDEPENDENT POWER PRODECERS BECOMES A DISTANT DREAM
The financial closure of the 12 independent power projects shortlisted by the
power ministry for special focus is proving to be a long haul. The stumbling
blocks include the absence of a payument security mechanism, inability of stated
to extend escrow cover, promoters' financial troubles and fuel supply glitches.
Six of the 12 projects coming up in Andhra Pradesh face the absence of a payment
security mechanism. APTransco, the state -owned transmission company, does not
have money to buy power from these projects, leading to financial institutions
dragging their feet on financing.
To tide over the problem, the power
ministry has persuaded the Andhra Pradesh government to sign an agreement with
the Centre to strengthen its payment situation. The state government has also
been advised to present a business plan indicating measuresthrough which
payments will be ensured by the state electricity board for the power bought
from these projects.
The division of Uttar Pradesh has created problems for
two independent power projects coming up in Uttaranchal. For the Vishnuprayag
and Srinagar projects, the Uttaranchal government has asked for 12 per cent of
the generated power free of cost. However, Uttar Pradesh, which was expected to
buy the biggest chunk of power from these projects, is not agreeable to the
conditions now, and has refused to oblige.
The S Kumar's -promoted Maheshwar
hydel project is in trouble on account of the financial problems faced by the
group. The promoters have expressed their inability to bring in their equity
portion of rs. 250 crore and financial institutions are looking at the
possibility of introducing a new partner.
The Bina Project in Madhya Pradesh
is again faced with the problem of absence of a payment security and lack of
escrow cover. Also, the state government has not yet decided to explore the
possibility of firming up a business plan to negotiate with the financial
institutions. The power ministry has advised the state government to firm up a
business plan on the lines suggested for Andhra Pradesh.
The Reliance group,
the promoter of the Jamnagar project, is going slow on the project. The Gujarat
government's paying capacity for the power is uncertain and Reliance is looking
for other possible buyers of power from the plant.
In the case of Rosa
project in Uttar Pradesh, the issue of fuel supply has held up the project. The
Promoters (Indo Gulf fertilizers) and fuel Supplier (Coal India Ltd) have not
been able to reach an agreemnt on the commercial terms of supply of coal to the
project.
NO LIGHT AT THE END OF TUNNEL
12 IPPs in the power
ministry's priority list
IPPS STATE CAPACITY
Ramagundum Andhra
Pradesh 520
Vemagiri Andhra Pradesh 468
Kondapally Andhra Pradesh 350
NCC/Gautami Andhra Pradesh 464
BSES Power Andhra Pradesh 210
Jegurupadu
Andhra Pradesh 216
Jamnagar Gujarat 500
Maheshwar Madhya Pradesh 400
Bina Madhya Pradesh 578
Rosa Uttar Pradesh 567
Vishnuprayag Uttaranchal
400
Srinagar Uttaranchal 330
58 projects cleared for a execution by the
central electricity authority, 10 had been commissioned while 8 where under
various stage of construction. These projects have a capacity of 6542 MW.
Courtesy: Business Standard: 24 March, 2002
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