REL backs out of MoU with Orissa

Reliance Energy (REL) today backed out of signing an MoU with the Orissa government for the first phase of its proposed 12,000 MW mega power plant at Hirma in Jharsuguda district following a disagreement over the inclusion of certain conditions in the deal.

The conditions related to the clearance of over Rs 2,000 crore of dues owed by three REL-owned distribution firms to the state-owned Grid Corporation of Orissa (Gridco).

The state government had insisted on the inclusion of a clause in the MoU which stipulated that the company could not go in for land acquisition for the project unless it cleared the dues.

However, this was objected to by officials of REL. The occasion saw 10 other MoUs being inked for setting up of as many thermal power projects envisaging a combined generation capacity of 10,900 Mw at an investment of Rs 45,000 crore.

There were hectic parleys between state energy officials and the REL team, led by R-ADAG group director Rajesh Tiwari, yesterday night and today morning to thrash out a solution, but to no avail. Sources said the REL insisted on deletion of the condition from the MoU, which the state government refused to do.

Meanwhile, state Energy Minister SN Patra said signing of the MoU with REL had been deferred as many contentious issues remained to be resolved. "A task force will look into the issues, and it will take some time," he said.

The first phase of the REL's 12,000 Mw power plant comprised generation of 4,000 Mw at an investment of Rs 16,236 crore.

The other 10 projects for which MoUs were signed today include: KVK Nilachal Ltd (600 Mw at an investment of Rs 2,580 crore) in Angul/Dhenkanal district, Calcutta Electric Supply Corporation (1,000 Mw, Rs 4,042 crore) at Neulpuri in Dhenkanal district, Tata Power (1,000 Mw, Rs 4,348 crore) at Naraj Marthapur in Cuttack district, Monnet Ispat, Energy Ltd (600 Mw, Rs 2,852 crore) near Angul and Essar Power Ltd (1,000 Mw, Rs 4,500 crore) near Talcher.