Priyadarshi Siddhanta : New Delhi, Thu Feb 21 2013,
08:54 hrs
NTPC
Ltd has informed the government that it cannot accept the fresh terms set by
the Ceylon Electricity Board (CEB) for its proposed 500-MW project in Sri
Lanka. Indicating its willingness to withdraw from its maiden overseas venture,
the state-owned power generator has sought permission to pull out two of its
top functionaries from the island nation.
NTPC
and CEB had inked an agreement in 2011 for jointly setting up a 500-MW power
project at Trincomalee at a cost of over Rs 4,000 crore, but the project is yet
to take off due to persistent differences between the two entities. NTPC has
now expressed serious concerns on CEB's flip-flop on the joint venture. In a
letter to CEB chief W Abeywickreme on January 15, NTPC chairman Arup Roy
Choudhury said the fresh terms and conditions set by the Sri Lankan state-run
electricity board is "unacceptable to NTPC as it amounted to substantial
changes agreed on the initial Power Purchase Agreement (PPA)."
"You
will appreciate that the draft PPA was finalised with CEB after prolonged
discussions on all issues and then it was initialed in February 2011. In our
mutual interest we should not re-open any of the settled issues and now sign
the PPA and other agreements without further delay," Choudhury said in the
missive to Abeywickreme.
Separately
the NTPC chief is learnt to have conveyed to power secretary P Uma Shankar and
India's high commissioner to Sri Lanka Ashok K Kantha that the CEB is going
back on the signed PPA and the project is unable to make any headway. "In
view of the slow progress in the development of the project, NTPC has proposed
to bring back two senior level executives posted in Sri Lanka for this
project," a top power ministry official said. The company did not reply to
an e-mailed questionnaire in this connection, but a source in the PSU said that
Roy Choudhury is upset on the way CEB is dragging its foot. He pointed out that
the project was planned and furthered as part of growing bilateral relations
between India and Sri Lanka and exuded confidence that CEB would not insist on
raking up settled issues.
On
January 7, the CEB chief had written to Roy Choudhury saying that certain
changes need to be incorporated in the existing PPA including downward revision
of operations and maintenance cost of the proposed power plant to Rs 20.5 lakh
per MW each year from the currently Rs 38.92 lakh. NTPC has protested saying
the estimate on this cost is based on its similar sized plants in India and the
CEB had been apprised of the same in advance.
Abeywickreme
has also demanded that the current returns on investment should also be down
scaled to 12 per cent return on equity as against 18 per cent post tax return
on the equity base. "This is non-negotiable as the RoI was agreed the
government of Sri Lanka and the CEB in 2006 and is very fundamental to NTPC's
investment decision," the power ministry official said.
'No relocation of North Karanpura project'
The
Cabinet Committee on Investment (CCI) on Wednesday decided against relocating
power producer NTPC's proposed 1,980-MW super-critical thermal project at North
Karanpura coalfields in Jharkhand. The CCI rejected the coal ministry's contention
that allowing NTPC to proceed with its power project at Tandwa in Jharkhand's
Chatra district would render over 6 billion tonnes of coal reserves sterile. It
also directed restoration of the coal linkage for the project.
