Tata's Mundra plant fully operational

Tata Power Co Ltd today fully synchronised the fifth and last unit of its ultra mega power project (UMPP) in Mundra, Gujarat, taking the project to its full capacity of 4,000 megawatts (Mw).

Four units of this UMPP--800 Mw each--were commissioned in a single year, which the company calls "a new record".

The addition of one of the country's largest power projects into the portfolio takes the total generation capacity of Tata Power, the country's largest private power utility, to 8,500 Mw.

The imported-coal based project on the Gujarat coast, however, is facing the pressure of increased fuel costs.

A change in Indonesian export regulations and a subsequent rise in exported coal prices have led Tata Power losing control on its fuel expenses.

The company, along with Adani Power Ltd, which is also a victim of this regulation, sought permission from the government to pass on the increased costs to its buyers. A decision on the same is expected soon.

"The synchronisation of the last unit is a significant achievement in a sector, which is ridden with numerous challenges. We eagerly await a viable solution by the Central Electricity Regulatory Commission and look forward to an early resolution of this issue," said Anil Sardana, managing director, Tata Power.

The company took a Rs 600 crore impairment charge last quarter, on account of Mundra UMPP, making a provision for possible losses. This is in addition to the Rs 1,800 crore impairment in the last financial year.

Tata Power's stock closed 0.36 per cent lower on Wednesday at Rs 98.20 on BSE, when the benchmark Sensex gained 0.57 per cent to 19,252.61.