SBI Caps has been asked to submit its report to the commission by August-end as the last date of finalising project tariff and power purchase agreement (PPA) is September 22, 2000, which is also the validity period of the MoU between the project promoters and Power Trading Corporation (PTC).

Sources said SBI Caps has been selected from among a list of prominent consultants including Pricewaterhouse, ICICI and CRISIL.

CERC has asked SBI Caps to appoint a technical consultant for technical matters related with the tariff evaluation from the project.

Under the terms of reference set for consultants, the commission has asked SBI Caps to review the tariff recommendations given by the government appointed tariff committee besides the revised tariff offer given by the project promoters.

Besides, the consultants have also been asked to benchmark the Hirma tariff with any other competitively bid power project in the country.

Sources said that it would only after a consensus is arrived on the tariff that the promoters would approach the government for yet another extension of the validity of the MoU and also the date for achieving financial closure.

CERC has asked SBI Caps to compare the fixed components of tariff at 68.5 per cent annual plant load factor (PLF)/availability and also at 75 per cent, 80 per cent and 85 per cent annual PLF/availability of Hirma project with other coal-based thermal power projects as cleared by the Central Electricity Authority (CEA).

This, as per CERC, should be done with appropriate correction for size and number of units, economies of scales besides any other relevant issues as considered relevant by the consultants.

SBI Caps would also study and suggest reasonableness of tariff at higher operating level of 75 per cent, 80 per cent and 85 per cent by taking into account the commitment made by the five offtaking state electricity boards (SEBs) - Haryana, Punjab, Rajasthan, Madhya Pradesh and Gujarat.

The major differences of opinion between the project promoters and the PTC is the lack of an appropriate tariff structure for the project. Whereas the government appointed tariff committee had opined that the fixed charge component of tariff will be a levelised tariff at the rate of Rs 1.27 per Kwh for a period of 30 years, the project promoters had listed a levelised fixed charge of Rs 1.745 per KWh for the first 12 years and Re 0.5185 per Kwh for the next 18 years or a standard tariff of Rs 1.4633 per Kwh for thirty years. This was worked out at a minimum guaranteed off take level of 68.5 per cent annual PLF.

Other unresolved issues relate with the compatibility of foreign exchange component of tariff with respect to financing, operation and maintainance (O&M) charge, indexation of O&M charge and also the fuel charge component.