Eurokapital Factions Bicker Over Malpe Power Project

The Eurokapital-promoted 156 mw Malpe barge-mounted power project has taken a curious turn with two factions of the Germany-based parent company claiming their right to implement the project.

In an attempt to settle the issue, the Karnataka government is writing to both companies, Euro India Energy Ltd and Euro India Power Canara Ltd, that the project will be handed over to the one that pays the security deposit of Rs 10 crore as per the agreement with Eurokapital.

Eurokapital, the original promoter of the Rs 600 crore project, has been declared bankrupt by a Hamburg court which led to the state government suspending negotiations with it. But when both the companies separately wrote to the state government stating they were financially and technically sound to implement the project, the government decided to review its stand.

A spokesperson of Euro India Power Canara Ltd told Business Standard that his company was not aware of the existence of Euro India Energy Ltd. "We are not aware of such a company. We are waiting for the letter from the state government," he said. He aid though Eurokapital had been declared bankrupt, Euro India Power Canara Ltd has the financial muscle to fund the project on its own.

"We are talking to financial institutions for funding the project. We might even bring in more partners," he added.

The naphtha-based project, to be set up near Malpe, South Kanara district, is among the four barge-mounted projects selected through competitive bidding. The site for the project has not been finalised, nor has clearance from the environment ministry been received.

Eurokapital has also not submitted the detailed project report though the power purchase agreement was signed on March 10, 1997.

The company had, however, informed the government that it would make its own arrangement for fuel supply.

The other barge-mounted power projects in the state include the 170 mw naphtha project at Bengre promoted by Smith Cogeneration India Pvt Ltd, the 200 mw naphtha project at Tannirbhavi promoted by Chicago Power Co and the 110 mw Kumta project which is being promoted by Canadian Universal Water and Power Ltd. In August, the state government announced its decision to set up an independent power regulatory commission as part of its plan to launch power sector reforms. It also announced plans to restructure the state electricity board and privatise distribution.