Cea Withholds Clearance To Rosa Thermal Power Plant
The Central Electricity Authority (CEA) has withheld its techno-economic clearance (TEC) for the Rs 2,453-crore Rosa thermal power plant in Uttar Pradesh following a dispute between Indo-Gulf Fertiliser and the Uttar Pradesh State Electricity Board (UPSEB) over the project cost.
The CEA, which met here on Monday to discuss the project, has asked promoters Indo-Gulf and consumer UPSEB to resolve their differences before approaching it again for TEC.
In fact, there seems to be a deadlock between the two sides over the cost for the 567 mw project.
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While UPSEB is insisting that Indo-Gulf should lower the cost by Rs 56.7 crore, the latter is refusing to budge.
Indo-Gulf president K S Rao told Business Standard that the project would be shelved if the board continues to press for the reduction.
One of the CEA members said, from our side the project is both cleared and not cleared.
He elaborated that the differences between the promoters and the board have to be settled before approching CEA again for clearence.
CEA is against any negotiations on the project cost once the techno-economic clearance is granted. Company officials were taken aback by the stand UPSEB took at the meeting.
Rao said that there was no rationale behind the UPSEBs demand for a reduction in the project cost.
The board has arbitrarily asked for a reduction of Rs 0.1 crore per mw for the complete project, he said.
Earlier, the project was a under cloud as financial institutions had asked the company to produce a corporate guarantee for it.
Despite the FIs stand, the company is not willing to offer the guarantee.
Industry sources are, however, of the view that once any FI asks for a corporate guarantee, other lenders would follow suit.
The project is proposed to be financed through 70 per cent loan and 30 per cent equity.
One of the major lenders to the company, the Industrial development Corporation of India (IDBI) considers the venture risky and has asked the company to produce a guarantee for the money lent.
The projects other financers include Power Finance Corporation and the US Exim Bank.
The Birla group has a 27 per cent equity valued at Rs 200 crore, while 26 per cent of the equity, totalling Rs 191, crore is held by Powergen of the UK.