In yet another twist to the escrow allocation process in Madhya Pradesh, both GVK and STI Power have taken the state government to court challenging the entire escrow allocation process.
With this, there are now seven independent power producers (IPPs) that have taken the state government to court over the issue.
Some of the other IPPs that have taken the state government to court are, Essar, Mukunds, Madhya Bharat and Bhilai Steel.
The petitions filed by these IPPs were either on the logic of re-opening contracts or on the time given for the promoters to put in their revised estimates.
Both GVK and STI are among the 10 liquid fuel-based power projects that were awaiting the state government's decision on the escrow allocation towards liquid fuel projects.
The state government after shortlisting three coal projects (Daewoo, Bina and Pench) and Skumar's hydel project for the escrow allocation in September had asked the promoters of liquid fuel projects to send revised bids after scaling down their tenure of power purchase agreements from 30 years to 15 years.
After the financial institutions agreed to fund projects totalling a capacity of 2,561 mw, the state government started re-evaluating the escrow allocation process for IPPs in the state from July this year.
Apart from cost factors these allocations were to be made on the fuel and the load factors in the state, implying that there would be liquid fuel projects would be included in the list projects for escrow allocation.
Out of the 10 projects, only five promoters had submitted their revised proposals to the state government.
Essar, promoters of the Bhander project had challenged the state government move asking for fresh proposals. The government decided not come out with any decision on the liquid fuel projects.
The state government thereafter set September 30 as the date for deciding the fate of liquid fuel projects. Meanwhile, as more frustrated promoters went to the high court, the state government could not announce the list of projects for the escrow cover as the high court decision could change the entire allocation.
The state government, promoters and the FIs are now awaiting the high court order before the actual escrow allocation is made.
