| "If a settlement is indeed achieved and leads to a renewed focus on Reliance Energy's business", it could re-kindle a bidding process for a much-needed power project in the state, they say, "irrespective of who wins the bid." |
| The project is a 1,400 MW gas-based combined cycle power plant in Bidadi that the Karnataka Power Corporation Ltd (KPCL) wants to build. |
| Among three technically qualified potential suppliers of natural gas to run the plant, was Reliance Energy with its Krishna Godavari basin gas find. The other two were public sector ONGC and IOC. |
| The project had hit a snag with all three failing to come in with price bids despite an extension till December last year. KPCL was at the time close to striking a power purchase agreement with the Power Trading Corporation Ltd. |
| That the project was alive, and may soon be kicking, was hinted at by a senior KPCL official: "We have had a round of presentations recently. So far a decision hasn't been taken." |
| KPCL and the bidders Reliance may now get another shot at agreeing on a price, a key issue in the bids not coming through earlier. KPCL's $3 per mmbtu (million British Thermal Units) was well below the market linked prices that large importers such as the US will pay. |
| Alternative routes were few, including KPCL building its own facility at Mangalore and importing directly from suppliers in West Asia. |
| "This project is crucial for the power-hungry state," industry sources said. "Two years ago, McKinsey, a consultancy, found in a survey power shortages could make IT firms leave Bangalore," they said. |
| Earlier this week, former energy department secretary and current chairman of the Karnataka Electricity Regulatory Commission said, private captive generator owners should produce more and sell their excess power to the state's electricity companies. |
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