Seeking dismissal of the petition filed by Reliance Power Limited (RPower) against invoking bank guarantees, Andhra Pradesh Central Power Distribution Company (APCPDCL) -- one of the procurers of the proposed Krishnapatnam ultra mega power project -- has said the company's key contention of rise in Indonesian coal prices or the change in Indonesian law had no relevance to the power purchase agreement (PPA) or its force majeure clauses.
“...As a matter of fact, under the guise of Indonesian government's decision revising the term of sale of coal, (the company) has abandoned the project long ago on June 15, 2011... There is neither change in law as per PPA, nor there is force majeure event as claimed by the petitioner,” it said in its affidavit filed in the Delhi High Court on April 16.
Having waited for quite a long time and after issuing notices earlier, the procurers/respondents decided to terminate the agreement and in pursuance thereof decided to invoke bank guarantee, which is strictly in compliance with the provisions of PPA, it maintained.
An RPower spokesman when contacted for the response on the claims made by the AP power utility said the company could not comment on the issue since the matter was in the court.
However, RPower in its earlier petition said; “Procurers on the other hand were under an obligation to discharge certain Conditions Subsequent, which they failed to comply with. As a result of which the petitioner has been prevented from discharging its obligations under the PPA.”
The possession of entire land required for the project and issuing an irrevocable letter to the lenders accepting the rights provided to the lenders under the PPA, is still awaited, according to the petitioner.
On April 17, the Delhi High Court posted the matter for further hearing on May 15 after acknowledging the reply filed by APCPDCL while granting two weeks’ time as sought by other respondents (the other procuring states — Tamil Nadu, Karnataka and Maharashtra), for filing their reply. It is expected that RPower would file its rejoinder, if any, after other respondents file their replies. Till such time the stay granted by the court would continue.
It may be recalled that the Delhi High Court had passed an interim order on March 20 directing that no coercive steps be taken for the time being against RPower on behalf of any of the states procuring power from the said project.
RPower was awarded the project in Andhra Pradesh after it emerged as the successful bidder with a levelised tariff of Rs 2.33 per kwh and got the entire shareholding of the Coastal Andhra Power Limited, the special purpose vehicle for the project, transferred on its name in January 2008.
The company had moved the high court after AP Southern Power Distribution Company Limited (APSPDCL), the lead procurer, had issued notices demanding payment of Rs 400 crore to the procurers with a rider to invoke the bank guarantee of Rs 300 crore for the alleged abandonment of the construction of the project by CAPL.
The power utility in its affidavit, also refuted the charges made by the petitioner that the procurers had failed to fullfil the obligations in terms of providing land for the project in time or the facilitation of the coal import corridor at Krishnapatnam.
Though there is no element of arbitration in this matter, if at all any, it is to be adjudicated by the Central Electricity Authority (CERC) as per the clauses of the PPA and therefore the court has no jurisdiction to entertain the petition, the respondent stated while referring to one of the contentions of the petitioner.
Moreover, APCPDCL said though the company had intimated that they had achieved the obligations as per the articles of the PPA, it failed to provide any documentary evidence in support of its claim.
“(The) Petitioner stated that they have communicated the progress of the project vide letter March 25, 2011, indicting that they have executed the coal supply agreement dated April 8, 2010, with Reliance Coal Resources Private Limited (RCRPL) to supply imported coal from mines located at Musi Rawas regions in South Sumatra, Indonesia, is baseless and false. The petitioner has not provided the copy of contract executed between RCRPL and the Indonesian mining company in spite of repeated requests made by the procurers," it said.
The power utility also alleged that though the petitioner said it had achieved the financial closure and awarded the EPC contract for placing the order for boiler, turbine and generator (BTG) for the project, the company failed to submit any relevant documentary evidence in support of the same.
