Last December, all outstanding issues like the CST and risk-sharing forumla were sorted out paving the way for granting the counter-guarantee for the fast-track project, hanging fire for the past five years.

Though all hurdles have now been cleared, last-minute differences which have cropped up owing to differing perceptions on the paying capacity of APTransco could further delay the project, sources felt.

The financiers for the $1.2-billion project have demanded that APTransco identify the high-tension consumers for the power generated by it and work out the revenue generation from each of the consumers and their capacity to pay for the power drawn.

APTransco has rejected the demand, terming it uncalled forconsidering the host of other guarantees being committed to the project.

Senior APTransco officials said that the utility had made it clear that identification of high-tension consumers does not arise, and at the most only the zones where the power from the Hinduja project was to be distributed could be specified.

The project financiers have also demanded that APTransco open an escrow account well ahead of the activation of the power-purchase agreement which, too, has been turned down by the corporation. As is the usual practice, the escrow will be activated only 30 days before the commercial operation date of the project, and there is no case for making an exception for this project, the APTransco sources said.

With nearly 1,000mw additional power generation expected in the state over the next one year through short-gestation power projects, APTransco will need to open escrow accounts worth Rs 50 crore-60 crore per month as a fall-back for the financiers of the projects. The sources said that for allthese projects, APTransco was adopting the 30-day-before COD norm, and they did not see why they should make an exception for the Vizag project, which would be operational only after 36 months, the sources said.

Thus, from all indications, the financial closure for the major independent power producer, earlier expected to be completed by the middle of this month, could drag on for several more weeks, further delaying project work. While a major chunk of the financing--$650 million--is to come from the Japanese Exim bank, the ECGD of the UK is putting in $150 million towards the project.