Govt. denies irregularities in Konaseema power project deal

By Our Special Correspondent

HYDERABAD, MARCH 13. The State Government here on Tuesday refuted the allegations of violations of bidding norms in awarding the 450 MW gas-based power project to Konaseema EPS Oakwell Power Limited.

Addressing a press conference Mr.K. Subbarayudu, Minister for Energy, and the Energy Secretary to the Government, Mr.V.S. Sampath, said the two companies joined together and were permitted to develop a single project with 359 MW with natural gas as fuel.

The reasons for the merger were: the barge-mounted EPS Oakwell Power Limited did not have fuel allocation for the PPA period of 15 years (it had fuel allocation for only seven years) and the Konaseema Power Project, on the other hand had gas allocation but did not have a sanctioned power project.

The two companies had agreed to come together and adopted the lowest tariff of 94 paise as levellised fixed charge and 98 paise at current exchange rates and were permitted to proceed with implementation of a combined project.

As the original company retained the 11 per cent equity as required and went in for a new partner, as per the conditions there was nothing wrong in awarding the project to the new one, he clarified.

The Minister said the EPS Oakwell Power Limited which was awarded project through international competitive bidding route (ICB) but did not have fuel allocation for the PPA period of 15 years, made proposal to induct M/s. Konaseema Power Corporation Limited which had gas linkage and requested for permission to convert into land-based project with the name M/s Konaseema EPS Oakwell Power Limited.

M/s EPS Oakwell Power Limited was awarded a project on ICB and it was they who inducted the other into their combined strength and sought enhancement of capacity to 358.9 MW to enable them to match the lowest tariff obtained in the ICB. The Minister was of the view that the project was an ICB project. The Minister maintained that it was so because the original promoter was selected through ICB and the lowest tariff obtained in the ICB was maintained.

The capacity was increased because they had the wherewithal and were ready to give power at 1.75 per unit. Any company coming forward for this would be given the same treatment, he said.

The Minister said that the Congress which had earlier discussed the issue in detail in the Assembly was repeatedly resorting to a smear campaign to tarnish the image of TD. The ruling party was aiming to achieve surplus power at lowest cost in the country.

Earlier, Dr.Y.S. Rajasekhara Reddy, Leader of the Opposition, alleged irregularities in the allocation of the project and referred to a query from the Ministry of Power seeking confirmation as to whether the projects earlier being developed independently by the two companies were no longer being pursued and instead a single project was proposed to be developed by them.

The letter also sought clarification on the mode of award of the 358.9 MW power project to the joint venture company if it were a new company. It also sought to know whether the awarding of the project did not amount of violation of the guidelines making ICB mandatory.

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