Date:18/12/2007 URL: http://www.thehindu.com/2007/12/18/stories/2007121854100400.htm

Andhra Pradesh - Hyderabad

Cabinet nod for BPL project revival

Special Correspondent

It will have an installed capacity of 600 MW against 520 MW planned originally

Original PPA signed with M/s BPL to be reinstated
Cost reduced from Rs. 2,650 crore to Rs. 2,475 crore

HYDERABAD: The Cabinet, at its meeting here on Monday, gave the green signal for the revival of M/s BPL’s power project at Ramagundam with an installed capacity of 600 MW against 520 MW planned originally.

To facilitate the revival (sought by the Centre on the request of Japan), the Cabinet decided to reinstate the original power purchase agreement (PPA) signed with M/ s BPL. AP Transco had earlier terminated the PPA and handed over the project to the AP Genco for execution as the BPL failed to achieve financial closure.

Information Minister A. Ramanarayan Reddy told reporters later that M/s BPL would, however stick to the cost structure finalised by the Rosaiah Committee on power sector that suggested Rs. 4.76 crore a MW and a levelised tariff of Rs. 1.79 a unit.

AP Transco and the distribution companies would get necessary approvals from the AP Electricity Regulatory Commission for the reinstated PPA.

On the controversial issue of shifting to consumers the burden of rupee-dollar rate fluctuations covering the loan taken by M/s. BPL, the Cabinet resolved that “appropriate cost hedging and swapping to take care of the foreign exchange variations should be allowed”.

The Minister claimed that the company had now reduced the cost of the project from Rs. 2,650 crore to Rs. 2,475 crore due to depreciation of the dollar against the rupee.