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Reliance Power has written to the Andhra Pradesh government seeking to exit the stalled 4,000 MW Ultra Mega Power Project in Krishnapatnam.
Reliance had won the ₹17,500-crore project in November 2007, quoting a uniform tariff of ₹2.33 a unit for 25 years. The project was supposed to supply 1,600 MW to Andhra Pradesh, and 800 MW each to Tamil Nadu, Karnataka and Maharashtra. However, in 2011, Reliance Power sought a renegotiation of the power purchase agreements following changes in mining regulations in Indonesia, from where it proposed to bring coal for the plants.
Seeing no progress in the project, Andhra Pradesh Central Power Distribution Company, in 2012, sent a notice to Reliance saying that it would invoke the bank guarantee.
Reliance Power approached the Delhi High Court and got an order which restrained the discom from taking any coercive steps. The court, however, allowed the power procurers to slap a penalty on Reliance Power. While the company had so far maintained that it is in discussion with the Andhra Pradesh government to get the project back on track, now, according to sources in the know, Reliance Power has suggested that the dispute could be resolved on the lines of Tilaiya UMPP in Jharkhand.
Last year, the Anil Ambani group company exited the 3,960 MW Tilaiya Ultra Mega Power Project citing non-availability of land and issues related to forest clearances for cancelling the power purchase agreement signed with 18 power companies across 10 States. Under the settlement, Reliance Power got ₹114 crore in compensation and bank guarantees of ₹800 crore.
The procurers of Tilaiya UMPP have accepted the termination of the agreement and agreed to purchase the entire shareholding in the project Special Purpose Vehicle, the company has told the Andhra Pradesh government, adding that issues pertaining to Krishnapatnam UMPP can also be resolved similarly by purchasing the ownership of the project SPV and returning the performance bank guarantees of ₹300 crore.
The decision to set up a series of ultra mega power projects was taken by Power Ministry in 2005. In the first phase, the projects were to come up at Mundra in Gujarat, Girye in Maharashtra, Sasan in Madhya Pradesh, Krishnapatnam (AP) and Tilaiya in Jharkhand.
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