Not too keen on Cuddalore Powergen project: Tangedco
June 15, 2016
The Hindu Business Line
The fate of Cuddalore Powergen’s 1,320 MW project could soon be sealed with Tamil Nadu Generation and Distribution Corporation (Tangedco), with which it has a power purchase tie-up, saying it’s no longer interested in the project due to inordinate delay.
Tangedco made the submission recently to the Tamil Nadu Electricity Regulatory Commission (TNERC) when a petition by Cuddalore Powergen seeking an extension of deadline came up for hearing. The TNERC has asked both the parties to file written submissions.
When contacted, Cuddalore Powergen officials said they remain committed to the project. Land acquisition for the 2x660 MW plant is progressing. A total of 1,100 acres is needed for the power plant and captive coal jetty and 775 acres have been acquired, environment clearance and coal jetty approval are in place and approvals are being revalidated. The power purchase agreement (PPA) with the utility is valid and binding and the company is only seeking an extension of time for financial closure, the officials said.
The project had hit various stumbling blocks including the global financial crisis of 2008, power sector crisis of 2011, delays in PPA clearance and other procedural issues, they added.
Cuddalore Powergen, a project of the promoters of BGR Energy, envisages investment of ?6,200 crore. It entered into an agreement with Tangedco in 2008 with a schedule to achieve financial closure in 12 months. But the deadline had to be extended and, in 2013, the TNERC granted a final extension up to April 2014.
BGR Energy sought two more years’ extension in 2014. This petition has come up for hearing now. If the company had achieved financial closure by 2014, the first of the 660 MW unit would have gone on stream in November 2017 and the second by 2018.
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