July 24: In a bid to expedite implementation of eight languishing nahptha-based power projects, Uttar Pradesh State Electricity Board has offered to pick up at least 10 per cent equity in the projects. The projects will be executed by independent power producers (IPPs) which will collectively generate an additional 1,055 mw for the state.

Top-ranking officials of the board revealed that almost all contentious issues which had delayed finalisation of the power purchase agreements (PPAs) had so far been sorted out. The PPAs with Wasan Exports along with its foreign partner, Westinghouse and Ensearch of the USA, for setting up a 355 mw power project in Kosikalan (Mathura) was expected to be signed within the next fortnight. The project was to be set up at an approximate cost of Rs 1,000 crore. According to UPSEB sources, the state electricity board's offer of equity partnership in the projects has been well-received by most of the IPPs. However, instead of the conventional route of pumping in investment, UPSEB's equity participation offer comes in the form of land and infrastructure. "We have enormous amounts of unused infrastructure and land which we can make available immediately for commencing work on the projects", said UPSEB source. This, they maintained, would cut down construction costs as well as reduce the time for execution of the projects from the proposed 24 months to 18 months.

The board would pick up 10 to 15 per cent equity held by the Indian partners in the projects. Another 30 per cent would be held by the foreign partners, while the remaining would be held by public and financial institutions.

"However, the exact quantum of equity which will be held by each will be decided at the time of financial closure of the projects", said a state electricity board official.

Apart from UPSEB's equity participation offer, the board has agreed to permit deemed generation above 75 per cent plant load factor (PLF).

It may be mentioned that earlier the board was not permitting deemed generation above 65 per cent PLF which had become a major contentious issue between the state electricity board and the IPPs which wore arguing that running the projects below 80 per cent PLF would make them unviable economically. The eight projects for which PPAs are being finalised include the Wasane' 355 mw Kosikalamm project and seven 100 mw naphtha-based projects to be set up by Indian Power Partners Pvt Ltd and Edison Agni Electric Corporation in Chandigarh, Enron India Ltd in Gajraula, Modi Mirrless Blackstone Ltd in Sahibad, RPG Industries Ltd in Calcutta, Controls & Switch gear Co Ltd in Roorkee, Gujarat Fluorochemicals Ltd in Varanasi, Ginal Filaments Ltd in Lucknow and NPCL in Ghaziabad. The approximate cost of setting up the 100 mw projects is around Rs 325 crore each.

It may be mentioned that the memoranda of understanding for these projects were signed in February and March 1995. Following this, Wasane had even submitted their draft PPA in July last year. However, according to UPSEB officials the projects got stalled both on account of difference with the IPPs as well as the fact that the Centre confirmed naphtha allocation for the projects only in April this year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.