as a result of which there has been significant alteration in the available quantity of coal”, adding that “on account of the above, the coal receiving and handling logistics for the project, which were designed as per the project documents, cannot be utilised completely and coal from non-link sources is loaded manually”.
“The project has become commercially unviable with the average plant availability factor of around 40% over past more than 270 consecutive days….” the termination notice states, adding that “on account of the complete inaction on part of the buyers (discoms) and UPPCL in remedying the alterations highlighted by it, Lanco exercises its right under Clause 13.6 of the PPA and terminates the PPA. The buyers are requested to enter into discussions to commence the process of buyout of the Anpara C plant in accordance to the terms laid out in Schedule 10 of the PPA.”
The petition to UPERC also states that the four discoms are in “material breach of their obligation under the PPA signed on November 12, 2006, inasmuch as they have defaulted in making timely and complete payment to the company for supply of electricity under the PPA and have also failed to institute the requisite payment security mechanism as mandated under the PPA”. It has made a strong plea that the regulator direct the four discoms to clear all outstanding dues amounting to Rs 431 crore for October-December 2012.
Arguing that the significant amount of outstanding dues coupled with the absence of a payment security mechanism has severely impacted the company’s ability to operate Anpara C at optimum capacity, the petition states that it has “unduly increased the financial burden on it resulting from the penal interest charged on delayed payments by consortium lenders and various vendors of the project...”, adding that it has made repeated requests to the respondents to institute a payment security mechanism that would “enable it to refinance the project and consequently alleviate the financial burden on the project cash flows”.
However, with the situation not being remedied, the company stated that it was “constrained to issue a preliminary termination notice to