AP discoms rule out settlement with R Power
Andhra Pradesh Government today ruled out in the Delhi High Court the possibility of a settlement with a subsidiary of Reliance Power Ltd in its dispute over the termination of its power purchase agreement for the Krishnapatnam Ultra Mega Power Project.
I am instructed to tell the court that we cannot settle the matter and it cannot be settled, senior advocate Jayant Bhushan, appearing for the Andhra Pradesh Central Power Distribution Co Ltd (APCPDCL) and 10 other discoms, told a bench headed by Acting Chief Justice A K Sikri. The court, however, granted a last opportunity to Coastal Andhra Power Ltd (CAPL), a subsidiary of Reliance Power, to try and settle the issue after its lawyer Rajiv Nayar submitted that they have met Union Power Ministry Veerappa Moily yesterday in this regard. Bhushan opposed the plea for adjournment and urged the court to pass the judgement on the plea of CAPL, which has sought an order to get the dispute resolved through arbitration. Do one thing. We keep our judgement ready and if you settle it (the dispute), then it (judgement) will not be pronounced, Justice Sikri said, adding, Rest assured, this bench will pronounce the order.
During the hearing, the counsel for CAPL said that on August 16, a representation was made before the power minister and subsequently the officials of the firm met the minister on August 22.The court then fixed the matter on August 30. Earlier, CAPL had filed the petition against the verdict of a single judge who lifted the stay on AP government's notice to encash Rs 300 crore bank guarantee as penalty and terminate the power purchase agreement with the R Power's firm.
In its plea, had said that the issue of termination of its power purchase agreement with discoms owned by Andhra Pradesh government and others for the power project can be decided only through arbitration. The state-run discoms had entered into the agreement to purchase electricity from 4000 MW Krishnapatnam Ultra Mega Power Project, to be established by CAPL. Later, the discoms served the notice to CAPL terminating the power purchase agreement and decided to encash the bank guarantee on account of delay in executing the power project. The appeal was filed a day after the single bench had dismissed CAPL's petition. Reliance Power had in November 2007 won the bid to construct the ultra-mega power project and supply electricity to distribution companies at 2.33 rupees per unit to 11 power distribution companies in Andhra Pradesh, Karnataka, Maharashtra and Tamil Nadu. In June 2011, CAPL informed the Andhra Pradesh-owned discom that it was impossible to set up the power plant as a regulatory change in Indonesia has made imported coal costlier. According to CAPL, the price of coal in Indonesia rose from 24 USD per tn to 60 USD per tn and this has rendered the project unviable.
PTI
