The Hindu : Andhra Pradesh News : Reliance mulls power project near Kakinada

Online edition of India's National Newspaper
Friday, Jul 16, 2004

Andhra Pradesh

Andhra Pradesh

Reliance mulls power project near Kakinada

By Our Special Correspondent

HYDERABAD, JULY 15. The Reliance Industries has proposed to set up a mega 1500-2000 MW gas-based power project near Kakinada. The company representatives met the Chief Minister, Y.S. Rajasekhara Reddy, on Thursday and discussed the proposal.

Disclosing this to reporters here, the Principal Secretary (Energy) and acting Chairman and Managing Director, APGenco, D.K. Panwar, said the Government would be interested if the pricing was good as it was the most important factor. He said that it would not be dedicated to the State alone and the energy would be provided to other states also. The company plans to commission the project by the first quarter of 2007.

The Reliance team also submitted a copy of the power policy agreement they had reached with the UP Government where it was priced at Rs. 2 per unit. Apart from setting up a gas-based plant, the Reliance Industries was also interested in using it as an industrial hub.

He also announced that a mechanism would be put in place in a week's time for working out the modalities to re-negotiate the PPAs with three independent power producers -- GVK, Spectrum and Lanco. He said the PPAs were essentially executed at a time when the macro-economic conditions were relatively weaker and have significantly improved since then. The Government was exploring all possible ways of reducing cost from the existing plants and was committed to procurement of power at efficient and economical prices to provide power at most affordable rates to the consumer.

Mr. Panwar said the proposed re-negotiations would be without prejudice to the matter pending in this regard in court.

In view of the Electricity Act 2003, prohibiting Transco from engaging in trading functions, the latter submitted a proposal to the Government for full allocation of PPAs directly to discoms. He said the Government accepted the proposal and directed it to submit a revised proposal by June 10, 2004, the statutory deadline under the Electricity Act. The APTransco requested time till July 31 and this was granted by the Government after the Centre extended the deadline under the Electricity Act by one year.

He said the entire process of PPA allocation was being carried out in view of legal requirement and the policy of Centre to implement reforms to improve service delivery at affordable prices to consumers.

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