After hanging fire for almost a decade, the much-talked about 1040 mw Visakhapatnam thermal power project promoted by the Hindujas seems headed for a quiet burial.
It is first of the seven fast-track power projects to be cleared by the Centre. The Andhra Pradesh government has told the Hinduja National Power Corporation Ltd (HNPCL) that its project is being shifted to the Eleventh Plan i.e., deferred by six more years is an indicator to this effect.
The Hindujas have reacted strongly, threatening to sue the state for compensation and invoke the provisions of the power purchase agreement to initiate "dispute resolution process".
HNPCL chairman R J Shahaney has asked the Transmission Corporation of Andhra Pradesh (Aptransco) to name a person to sort out the" differing perceptions" on the project.
HNPCL has engaged a retired IAS officer, D V L N Murty, as its representative. A high official in the state energy department said HNPCL does not figure in the government's business plan for the Tenth Plan already finalised.
In fact, the official said, even the other two major thermal projects in the private sector, the 520 mw Krishnapatnam project of GVK Industries and the 500 mw thermal project of BBI at Krishnapatnam do not figure in the business plan.
However, the expansion of the gas-based power stations of GVK Industries and Spectrum Power Corporation,(two independent power producers whose plans were cleared after the HNPCL project and form part of the seven fast track power projects), BPL's new 500 mw thermal power project at Ramagundam and the National Thermal Power Corporation's 1000 mw Simhadri power project at Visakhapatnam as well as several medium and small short gestation power projects find a place in the business plan for the tenth plan.
The business plan projects a net peak demand of 9,836 mw (against a demand forecast of 7,618 mw at the end of March 2002) for which an installed capacity of 11,016 mw is planned (against an installed capacity of 8,420 mw at the end of March 2002).
It anticipates a capacity addition of 3,367 mw from new projects made up of 1,000 MW from the Simhadri Project, 500 mw from BPL, 1,790 mw from expansion of existing continuous cycle stations and new short gestation projects, 1340 mw from the Srisailam pumped storage project (hydro) and 386 mw from the Rayalaseema thermal power station Stage II.
The business plan also takes into account the cancellation of license for captive power projects of a total capacity of around 1,200 mw and stoppage of import of around 300 mw power from the eastern power grid during the tenth plan period.
HNPCL was originally conceived during the Seventh Plan period and was the first private power project to be cleared under the liberalisation process.
The Central Power Authority had cleared the project earlier for being executed by the Andhra Pradesh State Electricity Board as a 1,000 mw plant at a capital cost of Rs 1,890 crore, but with liberalisation it was transferred to the Hindujas for execution at a capital cost of Rs 4,700 crore.
Several contentious issues were raised y the Hindujas during negotiations with the Centre . But the main hurdle was the capital cost which the state government felt was on the high side when compared to the Simhadri project.
The Hindujas have, over the past year, expressed readiness " for discussion to arrive at a mutually satisfactory resolution of the project cost", but there was reluctance on the part of the Andhra Pradesh government to open a dialogue.
