Power corpn dismisses Lanco appeal
Yoginder Gupta
Tribune News Service

Chandigarh, February 7
The Haryana Power Generation Corporation (HPGC) has won a major battle against a private power producer when the Appellate Tribunal for Electricity of the Union Government dismissed an appeal filed by Lanco Kondapally Power and Lanco Infratech Limited regarding the dispute over non-signing of the power purchase agreement (PPA) for procurement of 389 MW of power by Haryana.

The HPGC had issued letters of intent to three private producers, including the Lanco group, for procuring 2113 MW of power on July 12, 2008. While two other producers signed the PPA with the HPGC on August 7, 2008,

Lanco did not come forward to do so and was allegedly trying to wriggle out of the contract on one pretext or the other.

Lanco had earlier agreed to supply 389 MW for 25 years at a levellised tariff of Rs 2.355 per unit.

Lanco approached a Panchkula court with the plea that it should be given more time to sign the PPA because the land for its project in Orissa had not been acquired as yet.

The court extended the time for signing the PPA up to December 31, 2008.

Lanco is yet to comply with these court orders and the HPGC has launched contempt proceedings against it.

The HPGC also encashed Lanco’s bid bond of Rs 11.89 crore as it would have expired on January 15, 2009. The HPGC filed a petition before the Haryana Electricity Regulatory Commission (HERC) under Section 86(i) (f) of the Electricity Act, 2003, with a request for directing Lanco to sign the PPA and also for restraining it from signing any agreement with another party for sale of the 389 MW of power contracted with Haryana.

Lanco took the plea that only civil courts and not the HERC had the jurisdiction in the matter. However, the HERC restrained Lanco from selling the power contracted with Haryana to any other party

Lanco appealed to the tribunal against these orders of the HERC. After five hearings, the tribunal, comprising its chairman Justice M. Karpaga Vinayagam and its technical member HL Bajaj, dismissed Lanco’s plea that it had not signed any contract with the HPGC.

The tribunal held that the contract came into existence on the issuance of the letter of intent on July 17, 2008. It also held that the HERC had the jurisdiction to adjudicate the dispute.