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HC directive to Karnataka on Nagarjuna power project

Shivkumar

Varadarajan

BANGALORE, Jan. 4

IN YET another setback to its power policy, the Karnataka High court has directed the Karnataka Power Transmission Corporation Ltd and the State Government to send its reply within three weeks to the Nagarajuna Power's petition seeking early clearance to its 1015-MW thermal project hanging fire for five years.

This is the third independent power company to file a case against the State Government questioning its stand with regard to the clearances of the projects. GMR Vasavi Power Corporation Pvt, Ltd., which is implementing a 220 MW barge mounted liquid fuel project, had field a case and won the issue in its favour on the principle of promissory estoppel, which among other things provided a financial security package to the project. The case was filed when the State Government decided against extending the e scrow support following the recommendation of the Parekh Committee. In a similar circumstance, Atria Power Corporation Ltd., another IPP, has also taken legal recourse.

In its petition, Nagarjuna Power Corporation Ltd. has told the Court that its project has obtained all statutory clearances, which have been examined by the Finance and Energy Departments of the State Government. However, the all important Cabinet cleara nce to the proposal has been eluding causing undue delay in implementing the project.

It further stated that the substantial expenditure has been incurred on the pre-project implementation activities both by the petitioner and the respondents-- KPTCL and the Government. Tie-ups have been made with several organisations for the procurement , erection and commissioning of the plant machinery, establishment of the captive jetty, for the transportation of coal, fuel supply agreement has been concluded, to implement the project.

The company has already initialed a Power Purchase Agreement (PPA), while a EPC contract with Alstom has already been finalised. The only pending issues were approval by the State Cabinet of the PPA, the State Support Agreement and the State Government g uarantee.

The petitioner further stated that the State Support Agreement and State Government guarantee have also been examined by the Energy Department and Finance Department and accordingly approved the draft with a direction to place the matter before the Cabin et. This was agreed also by the Chief Minister.

The file has been lying with the Energy Department since November last. Subsequent letters and reminders were sent by the Chief Minister's office directing the first respondent ( the Energy Department) to put up the file before the cabinet immediately b ut nothing has happened

The company pleaded that the inaction of the first respondent (Energy Department), has been impeding the implementation of the petitioner's project, which is indeed all set to be one of the cheapest sources of power, particularly when compared with liqui d fuel-based projects.