A crucial meeting aimed at breaking the logjam on the Krishnapatnam Ultra Mega Power Project has been called by the Central Electricity Authority (CEA) in the first week of August.

This comes after Coastal Andhra Power Ltd (CAPL), the Reliance Power-arm that is executing the project, halted work at the site of the imported coal-based project coming up in Andhra Pradesh.

Representatives from CAPL and officials from beneficiaries led by distribution utilities from Andhra Pradesh and Tamil Nadu are slated to attend the meeting to chalk out a way forward on the stalemate. Andhra Pradesh is the lead procurer from the proposed 4,000 MW project.

CAPL had in June stopped construction work citing a hike in the cost of Indonesian coal that the project is to run on. A team comprising officials of the Ministry of Power, the CEA and the Andhra Pradesh Power Generation Corporation discovered that the work had ground to a halt when it visited the project site in coastal Andhra Pradesh on June 15.

CAPL claims that the new Indonesian Coal Price Regulation will push up the coal cost because of which the company would not be able to meet the conditions set by the lenders. This has affected its ability to meet the project cash flow requirements, it said, as explanation for stopping work. Reliance Power had won the project under tariff-based competitive bidding, quoting a levelised Rs 2.33 per unit (kWh).

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