Lanco says it got favourable APTEL ruling in Amarkantak issue

As per the APTEL order, Amarkantak unit 2 shall be paid regulated tariff based on the actual capital cost of the project

Lanco Infratech's received a favourable verdict on its year-long dispute with Haryana Power Generation Corporation (HPGCL) over the second unit of its Amarkantak power plant.

“As per the Appellate Tribunal for Electricity’ (APTEL) order, Amarkantak Unit 2 shall be paid regulated tariff based on the actual capital cost of the project. This would result in sustainable and profitable operation of the project at full capacity,” said Lanco, in a press release today. The exact tariff for the power plant, is yet to be known as the order has not been made public.

The 300 megawatt second unit which was commissioned, could not start generating due to the dispute, can now start generation. The power generator's power purchase agreement with Power Trading Corporation (PTC) to supply to HPGCL, was terminated. This was over the non-compliance of certain PPA covenants.

The receivables from this unit have been pegged at Rs 195 crore, by the end of the second quarter. The first unit of coal-based Amarkantak power, which is located in Chhattisgarh, has been generating power and earning revenues, unlike the second unit.  

Lanco's Rs 7,700 crore debt recast was approved by its lenders, last month. Amongst other developments, Lanco said that it has two cases pending verdicts with APTEL and that they were expecting favourable judgments.

“Once tariff orders are passed, we will take around six months for payments to be cleared. We expect the payments to come over time and not immediately,” said Adi Babu, the chief financial officer of Lanco, told Business Standard in an interview after its debt recast was approved.

The release of payments from its power plants is one of the positive developments that the company had expected after its corporate debt restructuring (CDR) package was approved by the lenders. As its payments from Karnataka state utility as well as that of Haryana is cleared, the company expects its business to start turnaround by March.