• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

BANGALORE, Sept. 6

THE Karnataka High Court has permitted the State Government a two-month extension for clearing the 1,000 MW thermal power project promoted by the Nagarjuna Group.

The extension was given after the Karnataka Government made a plea for the same on the ground that the subject had been placed before the Chief Minister, who also holds the energy and finance portfolios. The Government had sought the extension after the expiry of the four-month deadline given by the High Court Division Bench. The approval is for a payment security mechanism.

The project promoters had already submitted their alternative payment mechanism, as directed by the High Court on the basis of the recommendations of the consultants, Crisil Advisory Services. Crisil had suggested three options, which includes a letter of credit, reform-based payment security mechanism and creation of cess for creating a sinking fund for meeting the default payment obligations outside consolidated fund. These proposals were submitted in May this year. The delay in the final approval of the Government has again resulted in the project financial closure being pushed back.

During the four-month period, the Government has not been in a position to take any major decisions relating to the power situation for augmenting future availability. Besides, the projects that have been proposed by the State Government's utility, the Karnataka Power Corporation, have been stuck for want of various statutory or regulatory approvals.

Meanwhile, the power situation in the State has deteriorated as a result of poor inflows into reservoirs. The daily deficit in view of the poor inflows is close to about 10 million units a day.

This, in turn, has forced the Government to impose both unscheduled and scheduled load-shedding in a bid to restrict demand during the peak hours.

Besides, the State Government has also failed to make additions to capacity to meet the energy requirements forecast for the future. The 16th annual power survey of the Central Electricity Authority has forecast the requirement to be in the region of 37,235 million units per year for 2003-04 and 39,467 MU for 2004-05. This translates into a daily requirement of approximately 102 mu and 108 mu respectively.

But the capacity addition in the form of a 210 MW to the Raichur thermal station, is likely to at best augment availability to about 90 million units, according to current indications.

This consequently is likely to have grave repercussions in the State Government's industrial growth proposals. Karnataka has targeted a real SDP growth of 7.5 per cent over the next five years.

However, with the deteriorating power availability, there is a likelihood of slippage in this estimate with a concomitant revenue impact.

Send this article to Friends by E-Mail

Stories in this Section
Awards for energy management

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line