The Hindu Business Line : AES hopeful of Orissa nod for Chhattisgarh plant

The US power major AES Corporation on Monday expressed hope that the Orissa Government will consider the circumstances appropriately to pave the way for it to set up a 1,000-MW thermal power plant in neighbouring Chhattisgarh.

The company's reactions came following Orissa Government's refusal to give a no-objection certificate (NOC) sought by the Foreign Investment Promotion Board (FIPB) for AES's Chhattisgarh project.

`Disappointed'

"We are disappointed at the recent developments and delay in the matter of FIPB clearance for AES's Chhattisgarh project. The power sector in India needs foreign investment to add the much-needed capacity for bridging the demand-supply gap. We are confident that the authorities concerned will consider the circumstances appropriately and the matter would be resolved soon paving the way for AES's investment in Chhattisgarh," the AES Country Leader for India and Sri Lanka, Mr Srinivas Rao, said in a statement.

Orissa Government's Department of Energy had refused to give the NOC, maintaining that the company had not respected the shareholders' agreement for putting up two more units of 210 MW each at IB thermal power plant in Jharsuguda district.

The IB thermal power plant is run by Orissa Power Generation Corporation (OPGC), in which the AES has a stake of 49 per cent. In this regard, Mr Rao said OPGC had achieved significant technical and financial progress since AES had taken over the management.

Committed to OPGC

"AES remains committed to the expansion of the OPGC plant, in the best interest of OPGC and its shareholders. Further, we would like to mention that it is factually incorrect to say AES has not honoured the Shareholders' Agreement. We assure you that we are in full compliance with the Shareholders' Agreement," he said.

"The entire output of OPGC plant is sold to Grid Corporation of Orissa (GRIDCO) under a long-term power purchase agreement and AES does not believe that its proposed plant in Chhattisgarh in anyway affects the business interest of OPGC," Mr Rao added.

As regards the State Energy Minister, Mr Surya Narayan Patro's statement that the company had defaulted when it was involved in power distribution business, Mr Rao said the issue of payment of the Central Electricity Company's dues to GRIDCO was in dispute under International Arbitration.

"The arbitration hearings have been concluded and the award is awaited. We must appreciate that it is the responsibility of the Central Electricity Company as a utility, and not that of its shareholders, to collect the dues from the consumers and pay to GRIDCO," Mr Rao said. The FIPB had sought a `no objection' from Orissa Government, as such clearance was required when a foreign company having made an investment in any State in the country wanted to invest in any other State.

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