E-auction of imported gas for stranded power projects deferred by a day

With the stranded gas-based power plants finding it tough to tie up finances, the Centre was compelled to defer the e-auction for imported gas by a day.

According to official statement, the auction which was to open on Monday has been deferred by a day on request from the participants. It, however, did not cite the reasons given by the power plants.

In fact, the Centre had to delay the opening of technical bids as well on similar grounds.

The final auction will now begin on May 12, nearly a week after it was originally scheduled to take place.

Those associated with the auctions said that the deferment was due to banks’ unwillingness to provide guarantee to several bidders.

Bankers, whom BusinessLine spoke to, indicated that while larger firms where the group level exposure is not high did not face any problem, there were fears over firms with high debts.

“The issue is whether the projects would have been able to service the debt and find buyers for the power they generate,” one of the bankers said.

The auction is being held for two categories – 23 plants that get some domestic gas and 31 plants that are completely stranded.

The plants belong to Lanco, GMR, GVK, Reliance Power, Tata Power, Essar Power and others. Gas-based power plants will be bidding for support required from the Power System Development Fund (PSDF) and those seeking the least support will win and get supplies of imported gas.

In March, the Cabinet Committee on Economic Affairs had approved the scheme to provide support through the PSDF and help revive nearly 24,000 MW of gas-based power plants in the country.

As per the scheme, the net sale price of electricity to discoms has been fixed between ₹4.7 and ₹5.5. Additional support would be given to power generators through the PSDF.

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