Spic Electric Power Corporation (Pvt) Ltd (SEPC), a subsidiary of Tamil Nadu Petroproducts Ltd (TPL), has decided to go head with its earlier plan of setting up a power plant at Tuticorin in Tamil Nadu. It may be noted that the Rs 2,300 crore (estimated in 1995) project was shelved nine years ago due to a land dispute. SEPC has now said that an alternate site has been identified and had moved to the Ministry of Environment and Forest for the environment clearance.
It may be noted that the project was conceived in 1995 and shelved in 2001 due to the dispute which resulted the company concluding financial closure for the project.
According to TPL, promoted by the Southern Petrochemical Industries Corporation (Spic) and Tamil Nadu government, sources, “An alternate site for the project was identified and the same was approved by the Tamil Nadu Electricity Board (TNEB), Tuticorin Port Trust (TPT) and Central Electricity Authority.”
SEPC has found the land suitable. Demarcations under the Coastal Zone Regulation, Contour Survey, preliminary soil investigation have been completed”.
“The process of obtaining environmental clearance from the Ministry of Environment and Forests for setting up the project is at an advanced stage. SEPC will pay the arrears of lease rentals on taking possession of the land”.
According to ministry sources the proposal was considered at the 67th meeting of Expert Appraisal Committee (EAC) and TOR recommended and file is currently under process.
SEPC and an investor company have signed a Shareholders and Share Subscription Agreement (SSA) on May 28, 2009 for implementation of the power project. The investor company has agreed to bring in 74 per cent of the equity to the project.
TPL had said the detailed project report with the revised project cost, which was at Rs 2,300 crore in 2001, is under consideration by SEPC.
Consequent to the above developments, the arbitration proceedings between SEPC and TPT over the land allotted to SEPC and sought to be repossessed by the latter have been kept in abeyance.
“The ministry of power, Government of India has clarified the change to an alternate site would not alter the legal enforceability of the already concluded Power Purchase Agreement between SEPC and TNEB. In view of the substantial progress achieved, no provision in the value of investment and advance against equity is considered necessary,” according to TPL.
TPL has, during 1995-2003, invested Rs 27.64 crore in SEPC and given advances against equity amounting to Rs 33.91 lakh during the financial years 2006 to 2008, according to company’s official report.
In view of the considerable delay in the implementation of the project we are unable to express an opinion on the provision, if any, required in respect of the said investment and advances against equity, the report further added.
