Hindujas Seek Clearance For Fresh Vizag Unit Cost Estimate

Taking a cue from Cogentrix, the Hindujas are seeking a hefty increase in the capital cost of their 1,040 mw coal-fired Visakhapatnam power project, citing inflation as the reason.

The Hindujas have pleaded that the project cost has gone up sharply since the techno-economic clearance was accorded by the Central Electricity Authority (CEA) on July 25, 1996.

The Hindujas have already approached the Andhra Pradesh government to get a fresh techno-economic clearance for their Rs 4,000 crore project with an enhanced capital cost.

The exact increase in the capital cost because of inflation is being worked out by the Hindujas in association with the state government. After the finalisation of the enhanced cost, the promoters, along with the state government, will approach the Union power ministry for a fresh techno-economic clearance.

 

CEA has refused to give a fresh techno-economic clearance to the Cogentrix project with the revised cost, arguing that under the government notification, inflation could not be considered for cost revision. Cogentrix has sought an increase in the capital cost of its proposed 1,000 mw power project in Mangalore of Rs 73 crore plus $20 million.

CEA has said that Cogentrix itself is to be blamed for the cost escalation since, according to the terms of the techno-economic clearance accorded last year, a firm financial package was to be submitted to CEA within six months of the approval. Cogentrix, according to CEA, has failed to do so despite a lapse of about 10 months. In case the government approves the revised cost estimates of the two projects, it will have to give a higher price to the promoters for the power generated at the plants.