Tilaiya UMPP Future Uncertain as ‘Buyers’ Don’t Want Power
State, Tata Power also refuse to pay for a project that did not take off
New Delhi: The future of Tilaiya Ultra Mega Power Project (UMPP) hangs in limbo as some power procurers have refused to pay the fee for termination of power purchase agreement (PPA) signed with Reliance Power for electricity from the plant, a source familiar with the development told ET.
According to the source, Maharashtra and Tata Power Delhi Distribution (TPDDL) have refused to pay the termination fee of around .₹ 10 crore, saying they do not want to pay for a project which never took off and that they do not require power from Tilaiya anymore.
“This will delay the rebidding process of the UMPP. Unless all dues are cleared one cannot go ahead with floating fresh tenders for the project,” the source said.
Reliance Power had in April terminated the power project after delay in handing over of land by the host state Jharkhand and had said scrapping the project would result in a .₹ 360-billion reduction in its planned capital expenditure.
As per PPA norms, 18 procurers of electricity from the plant had to pay .₹ 114.43 billion to Reliance Power as termination fee. However, only .₹ 80.56 billion have been received so far.
“Contractually, they (procurers) cannot do away with not paying the termination fee. But it seems nobody wants to get into any hassle now. Even Ministry of Power is not taking any tough stand,” the source said. Maharashtra had signed PPAs for 300 Mw while TPDDL had sought 44 Mw from Tilaiya UMPP.
Maharashtra has said the state will turn power surplus by 2022 and thus, it will not require any power from Tilaiya. Therefore, it did not want to pay for a project which never took off.
Similarly, TPDDL said it has arranged for power from other sources after waiting for over five years to source electricity from Tilaiya.