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Gaurav Raghuvanshi

Hazira , May 12

ESSAR Power appears to have resolved its problems with the Gujarat Electricity Board (GEB) regarding an internal assessment of the State Government that the company owed its electricity board Rs 1,200 crore.

An internal committee of the Gujarat Government had assessed that the GEB was entitled to recover Rs 1,200 crore from Essar Power on account of "deemed sale" of power by the company to its sister concern, Essar Steel, in violation of the power purchase agreement with GEB.

"The issue has been resolved. It is all here for you to see that there is nothing in the issue," the Essar Group Director, Mr Prashant Ruia, said on Thursday shortly before the Gujarat Energy Minister, Mr Saurabh Patel, inaugurated a 100-MW captive power plant for Essar Steel.

The Essar Power Managing Director, Mr A.K. Srivastava, said that no claim had been raised by the Gujarat Government regarding the so-called dues. The matter was only raised internally in the State Government.

According to Essar Power, the power purchase agreement lays down the terms of sale of power very clearly and also provides for the dispute settlement mechanism if there is any difference of opinion between the two entities. If any power that is not taken by the GEB is supplied to Essar Steel over and above the company's quota as per the ratio, it is to be treated as deemed sale by the GEB to the private entity and the State Electricity Board has to be compensated for the power.

Essar Power runs a 515- MW combined cycle power plant at Hazira near Surat. While it sells 300-MW power to GEB, the rest is sold to Essar Steel.

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