Chhattisgarh government retracts on commitment to buy 30% power from new plants The Chhattisgarh government has gone back on its commitment to buy 30% of power generated from new plants, which comes as a jolt to private power producers such as GMR Infrastructure and DB Power that have invested heavily in the state. The state government’s move will jeopardise the financial viability of projects being set up at a total cost of about 42,000 crore to generate 7,000 mw power. “We do not want to buy power from them anymore as we are a power-surplus state,” a top official of Chhattisgarh State Power Trading Company (CSPTC) told ET. “We had planned that we would buy the power and trade it for profit. But since we signed the agreements, coal prices have gone up, so trading margin would be under pressure. Therefore, we now want to get out of the agreements,” said the official, who did not wish to be named. In 2006, the state government had sought private investment by committing to buy 5% of output at a nominal cost that would account for only cost of fuel, and another 30% of output at a tariff determined by the Central Electricity Regulatory Commission. The government signed a memorandum of understanding with power companies that would have translated into projects totalling 60,000 mw.
Posted on: Sun, 18 Aug 2013 19:15:47 +0000