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Stressed power projects: FM Arun Jaitley holds review meeting with lenders

Mundra project has accumulated losses of Rs 64.57 billion against a paid-up equity of Rs 60.83 billion

Press Trust of India  |  New Delhi 

Arun Jaitley
Union Finance Minister Arun Jaitley | Photo: PTI

Finance Minister on Saturday held a review meeting with and senior officials on the financial stress faced by some of the power projects, including that of and in Gujarat.

The high-level meeting was also attended by Principal Secretary to the Prime Minister Nripendra Misra, senior officials of power ministry, SBI chairman Rajnish Kumar, among others, sources said.

It is to be noted that last year offered to sell 51 per cent stake in its 4,000 MW Mundra power project for Re 1 to states like Gujarat, which gets electricity from it, to tide over the financial crisis facing this business. Besides, there were allegations that charging exorbitant electricity tariff in Gujarat.

However, the company refuted the charges saying it sold power to the state at a "very attractive" price of Rs 2.65 per unit over the last four years.

Ltd (CGPL), the unit which operates the Mundra project, wrote to Ltd offering to retain only 49 per cent stake and operate the project as a contractor provided the procurers buy all the power at higher tariffs.

In the letter, copies of which were marked to the principal secretary to the Prime Minister and Union power secretary, CGPL CEO Krishna Kumar Sharma said Mundra has accumulated losses of Rs 64.57 billion against a paid-up equity of Rs 60.83 billion.

It has an outstanding loan of Rs 101.59 billion and have stopped further disbursal due to non-viability of the project, he wrote.

Tata had in February 2006 won a bid for the 4,000 MW in Gujarat, quoting a price of Rs 2.26 for every unit of electricity generated. It had intended to fire the plan with coal imported from mines owned by the Tata Group in Indonesia.

First Published: Sat, January 13 2018. 22:41 IST