The US-based AES Transpower Corporation has signed the revised power purchase agreement (PPA) with the Grid Corporation of Orissa (Gridco), ending months of uncertainty over its proposed 500 mw thermal power plant to come up near the coal reserves at Ib valley.
The renegotiation of the PPA for the project was concluded some months back and a revised proposal was sent to the Centre for vetting after the state cabinet endorsed it in February. But the companys PPA with the erstwhile Orissa State Electricity Board (OSEB) had not been redrafted yet to incorporate the changes in the terms agreed upon between the two sides during renegotiation. To help the Centre scrutinise the project in its amended form and grant fresh counter guarantee, the power purchase agreement was redrafted and initiated afresh on Monday, Gridco sources said.
As per the revised PPA, the levelised tariff of the project has come down to Rs 1.76 per unit from the earlier Rs 2 per unit. Similarly, the initial tariff (i.e. tariff in the first year of generation) now stands at Rs 1.90 per unit as against Rs 2.34 per unit suggested earlier.
The tariff, however, has been calculated on a the basis of an exchange rate where $1 is equivalent to Rs 31.5 and is subjected to further fluctuations in the exchange.
The tariff rate was substantially brought down during the renegotiation mainly through reduction in the per mega watt capital cost of the project.
The per mega watt capital cost of the project now stands at Rs 4.15 crore as against Rs 4.75 crore proposed initially. However, to achieve this, AES has modified the physical configuration of the project from an unconventional 2X210 mw to the international size of 2X250 mw and agreed to relocate the units in the area earmarked for the fifth and sixth units of the Ib valley power complex instead of that of the third and fourth units.
This apart, during the PPA renegotiation, AES was forced to agree upon paying income tax on the performance incentives and grant a 2.5 per cent rebate on the power bills to Gridco in the event of purchase of power through the letter of intent. Similarly, the working capital requirement of the company was re-evaluated by setting the operation benchmark at the normative level of 68.5 per cent instead of 85 per cent as proposed earlier.
These concessions, including the reduction in the tariff rate, are expected to save the state exchequer about Rs 3,000 crore in the life period of the plant assumed to be 30 years in the PPA, said Jaydev Mishra, the chairman of the review committee set up to take a fresh look at the project by the J B Patnaik government in Orissa in 1995.
