Anpara thermal project faces another crisis

UP asks Lanco to obtain fresh approvals from the state power regulator.

The 1,000-Mw coal-based Anpara C thermal power project "" mired in controversy since its inception in the early 1990s "" seems to be heading toward another tangle with the UP government.

The government orders issued by the principal secretary (energy) state that Lanco will obtain the statutory approvals from the UP State Electricity Regulatory Commission. The power plant has also been directed to obtain the financial and technical approvals from the power regulator according to the revised project specification.

However, the Lanco Kundapalli power plant has been allowed to increase its capacity of production from two 500 Mw units to two 600 Mw units.

The government orders issued by the principal secretary (energy) states that Lanco will obtain the statutory approvals from the UP State Electricity Regulatory Commission. The power plant has also been directed to obtain the financial and technical approvals from the power regulator according to the revised project specification.

Last month, the state cabinet had allowed private investors to increase the capacity by 20 per cent. The land for the project was transferred to Lanco Anpara Power Ltd, a subsidiary floated by Lanco for the particular project.

According to a roadmap approved by the power regulator, Lanco has to complete the financial closure for the project by November, failing which it faces the threat of losing the project.

Official sources, however, admitted that obtaining regulatory approval for an increase in the capacity from 1,000 Mw to 1,200 Mw would be tedious.

According to Shailendra Dube, convener of the power employee's joint action committee that is opposing the privatisation of the project, even the power regulator had the authority to revise the installed capacity of the Anpara C plant from two 500Mw units to two 600 Mw units.

He maintained that the project was awarded to Lanco on the basis competitive tariff-based bidding since it had quoted the lowest tariff of Rs 1.91 per unit. He maintained that with the increase in capacity to 1,200 Mw the cost of generating per unit will go down.

"The RFP and RFQ for the Anpara C project were approved by the power regulator for the plant's capacity of 1,000 Mw. So how can the regulator increase the capacity to 1,200 Mw without inviting fresh bids for the power project?'' argued Dube.

He added that the action committee will challenge the government orders in the high court.

The project was awarded to the Hyderabad-based private power company promoted by Vijaywada Congress MP Lagadapati Rajagopal in accordance with the letter of acceptance issued by the UP government to Lanco on September 27, 2006.

The Lanco Kundapalli group had outbid Reliance Energy and the Essar Group for the 1,000-Mw Anpara project and showcased it as the first tariff-based competitive bidding project.

The power purchase agreement (PPA) for the project between Lanco Anpara Power Private Ltd and UP Thermal Power Generation Corporation was signed on November 12, 2006.