RPower, Lanco snap supply to UPPCL on non-payment

Written by Deepa Jainani | Lucknow | Updated: Feb 16 2013, 08:20am hrs
Power generating companies Reliance Power and Lanco Infratech have been forced to cut off supplies to Uttar Pradesh Power Corporation (UPPCL) with the latter not having cleared its dues. Reliance Powers Rosa thermal power station and Lanco Infratechs Anpara C thermal power station have stopped supplying power to UPPCL. As a result, the Rosa TPS in Shahjahanpur district has shut down one unit of 300 MW while Lanco Infratechs Anpara C project in Sonebhadra district has shut down one unit of 600 MW.

Both companies have shut down generation as we have not been able to make timely payments. While dues to Reliance amount to approximately R900 crore, Lancos dues are to the tune of approximately Rs 400 crore, an official of UPPCL said on condition of anonymity.

The Northern Region Load Despatch Centre also reports that while one unit of Rosa TPS has been shut since February 13 due to commercial dispute with UPSEB, one unit of the Anpara C has been shut down since January 24 due to a commercial dispute with UPPCL.

Both Rosa and Lanco have a total installed capacity of 1,200 MW each. While the former has four units, each of 300 MW, Lanco has two coal-fired units each of 600 MW.

Reliance Power had run into a commercial dispute with the UPPCL in July last year after which it manually shut two of its four units. Then too, UPPCL had dues of R373 crore towards Rosa.

When contacted, UPPCL sources conceded they have not been able to clear payments against power purchased from Rosa and Anpara C and said that the dues amounting to approximately Rs 1,500 crore had been accumulated. The UPPCL official said the corporation was working on improving its financial position and once the Centres bailout package in the form of a financial restructuring package comes through, the situation will improve.

However, also speaking on condition of anonymity, an official of Rosa TPS said that while it was aware of the poor financial condition of UPPCL, it was not possible to carry on without getting payments. UP cannot keep on buying power without paying for it. It has to work towards improving its financial position on an ASAP basis, he said.

Ashok Khurana, director general of the Association of Power Producers, too, was of the view that UP has to work out a way to make some payments to power producers, without which it would be impossible for them to run the business. Power developers cannot continue supplying power without getting paid for it. So even if there is a resource crunch, some part payment must be made by UPPCL so that developers can recover their basic cost.

Shailendra Dubey, secretary general of All India Power Engineers Federation and a former chief engineer of UPPCL, however, said: While one cannot defend UPPCLs action of not making timely payments, the fact that the Reliance and Lanco managements have opted to deliberately shut down their units amounts to highly irresponsible behaviour on their part. At a time when there is acute power shortage in the entire country, this act is unpardonable. If UPPCL was unable to pay the bills, they could have sold power through open access.