Power supplier goes back on promise
Yoginder Gupta
Tribune News Service
Chandigarh, May 14
The Haryana power sector has suffered another setback. A supplier, which had promised 300 MW of power to the state power utilities, has gone back on its word.

Haryana had entered into an agreement with the Power Trading Corporation (PTC), technically a non-government organisation but in practice as good as a Central Government undertaking, for supply of 300 MW power in 2005-06.

The PTC, in turn, was to get this supply from Lanco’s Amarkantak project to be established in Chhattisgarh. Since the government had reached this agreement through an MOU instead of the bidding process, the agreement came under severe criticism from the INLD. However, since the rate of Rs 2.25 per unit for 25 years was highly competitive and favourable to the state , the criticism did not make any impact.

The power was to flow to Haryana in September last. Already it has been delayed by eight months.

Now, the company has informed Haryana through the PTC that its project had been delayed as the supply of equipment from China had been held up following an earthquake in that country. What is more worrisome for Haryana is the virtual refusal of the company to supply power to it at the agreed rate.

The company has written that since it had an agreement with the Chhattisgarh government that 30 per cent of the power generated from the project would be supplied to the home state, it could not supply the entire 300 MW power to be generated from Unit I, which has come into operation.

Moreover, the company says since its fuel cost has gone up, the rate should be renegotiated. Sources in the Haryana power utilities say the company’s agreement with Chhattisgarh was signed after it had committed power to Haryana.

Also, the agreement does not mention that 30 per cent power is to be given to Chhattisgarh from each unit.

The company is putting up six units there. It can meet its contractual obligations towards Chhattisgarh from other units.

Haryana is now exploring what legal action it can take against Lanco.

It may be recalled that Lanco, which had also entered into another agreement with Haryana to supply power through the bidding process, has already gone back on that agreement. Meanwhile, an official spokesman said here today that the Haryana power utilities had made adequate arrangements to supply power to the agriculture and other sectors.

The utilities had made banking arrangement for short-term power supply for 300 MW from the Tamil Nadu Electricity Board (TNEB) and 40 MW from the Himachal Pradesh State Electricity Board (HPSEB) for the month of June.

The state would also procure 116.4 MW power from Himachal through the PTC. The banking arrangement for 200 MW from the TNEB and 80 MW from the HPSEB had been made for July.

The utilities will also procure 250 MW from Karnataka, 100 MW from West Bangal and 216 MW from Himachal.

For August, 50 MW will be available from the HPSEB.