Adani Power to end coal purchase contract with Mahavitaran

Friday, 27 Jan 2012

Adani Power Maharashtra Ltd a subsidiary of Adani Power Ltd, wants to terminate the power purchase agreement it signed with state owned distribution utility Mahavitaran Ltd due to reasons beyond the company’s control.

The company won’t be able to use coal from the captive block allotted to it for environmental reasons. It has offered to supply power at a higher price than agreed in the PPA.

The move raises a question mark on power supply from Adani Power’s 3,300MW Tiroda power project in the state’s Gondia district and means the state government may be unable to meet its target of ending power cuts in Maharashtra by the close of 2012.

The first 660MW unit of APML’s Tiroda power plant was scheduled to be commissioned in August and another 660MW unit by December.

Maharashtra has been reeling under a power shortfall of 4,500 to 5,500MW for more than a decade, with power cuts ranging from four hours in urban areas to 12 hours in rural areas. The shortfall has been narrowed to around 3,000MW in the last one and a half years due to the availability of power from various sources.

The state government had expected that this year an additional 3,000MW power would become available from private power producers and state power generation firm Maharashtra State Power Generation Co. Ltd (Mahagenco), which included 1,320MW from Adani Power’s plant at Tiroda.

APML cited unforeseeable circumstances for wanting to terminate the agreement in its letter to Mahvitaran, which has been reviewed by Mint.

The company said the ministry of environment and forests has denied clearance required for access to captive coal from the block allocated by the coal ministry at Lohara in the Chandrapur district of Maharashtra. MoEF said the allocated coal block is in the buffer zone of the Tadoba tiger reserve.

(Sourced from www.livemint.com)