CAPL wants AP govt to scrap PPA on power project

: Coastal Andhra Power Limited (CAPL), a subsidiary of Reliance Power Limited, has written a letter to the Andhra Pradesh government requesting it to cancel the power purchase agreement (PPA) it had signed for its 4000 MW power project, a non-starter, at Krishnapatnam.

A senior government official said Reliance Power is willing to surrender its 2,600 acres of land in lieu of which the company wants its bank guarantees back and also revoke liquidated damages besides land cost of Rs 226 crore.

"Reliance Power Ltd (RPL) had requested the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL), as the lead procurer ofKrishnapatnam UMPP (ultra mega power projects) to scrap the PPA and revoke the claim of liquidated damagesamounting to Rs 400 crore and initiate the action for release and return of bank guarantees of Rs 300 crore by all procurers to RPL," the official told PTI quoting the letter.

The Reliance Power, through its letter, informed that CAPL would return the land to the State government on the condition that AP DISCOMs shall release and return the bank guarantee amount of Rs 47.62 crore, the official said
Though the current market price of the land is much higher, the company said it would not claim that price with an intention to reach an amicable settlement and to avoid prolonged litigation in the matter