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

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

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.

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