HYDERABAD: The Hinduja and BPL power projects may become Enrons of Andhra Pradesh if revived with their power purchase agreements (PPA) in the present form.

With the outlay for the 1,040-MW Hinduja plant, as stated in its PPA a decade ago being Rs. 6,219 crores, its construction cost worked out to Rs. 5.98 crores per MW. It was Rs. 5.25 crores per MW in the case of the 520-MW BPL project whose capital cost was put at Rs 2,732 crores. The purchase price of Hinduja power for Andhra Pradesh Transco thus would have been above Rs. 5 per unit and that of BPL Rs. 2.80.

Assembly debate

As costs go up for any given period, the unit price of both will have to be far higher now. Congress leaders, during an Assembly debate at that time, cited their high costs to oppose the projects, estimating the additional burden to be placed by BPL on consumers at Rs. 200 crores annually. Similarly, the burden by Hinduja would be over Rs. 500 crores yearly. These figures, however, get revised upwardly as the reckoning is to be made at the present rates. The Maharashtra Government signed a PPA with Enron covering its 3,000-MW Dabhol plant but the problem arose when it had to actually buy the power.

In spite of BPL being a pithead station at Ramagundam with Singareni coal available at hand, its unit price was quoted at Rs. 2.80. In contrast, the same for NTPC's 1,000-MW Simhadri project at Visakhapatnam which gets coal from Talcher, came to mere Rs. 1.50.

Financial institutions reportedly considered the Hinduja and BPL costs high. Consequently, Hinduja did not achieve financial closure and the deadline for the same was extended twice for BPL. The Government was forced to scrap the BPL PPA and propose to hand over the project to Genco. The BPL approached the High Court citing two officials as respondents.

What observers say

Will the committee on Hinduja and BPL plants be able to bring down their costs to Simhadri level by Rs 4.50 a unit? "It may not and will not", say power sector observers.

Meanwhile, Transco CMD Rachel Chatterjee quit the committee on the ground that she could not be a party to a decision on BPL which cited her as respondent.

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