Videocon has sought a review of Crisil's tariff projections by the Tamil Nadu Electricity Board (TNEB) as it believes that the tariff figure of Rs 4.072 per Kwh arrived at by Crisil was not correct. The levelised tariff, as calculated by Videocon, based on Crisil report basis and assumptions, works out to be Rs 3.38 per Kwh and not Rs 4.072/Kwh.

On being contacted, a senior TNEB official confirmed the move and said that Videocon Power has asked TNEB to give them an opportunity to make a detailed presentation to the board on its project tariff, which as per Videocon is quite competitive. The managing director, Videocon Power, R N Dhoot has also met the TNEB chairman, R Poornalingam recently for reviewing the matter.

Moreover, as per sources, TNEB's statement that `escrow given to Videocon Power has lapsed' has also been questioned by Videocon Power. This is because a clause in the escrow agreement signed between Videocon and TNEB which clearly states that the termination date will be extended for six months if the lead Indian financial institution (ICICI in this case) intimates that financial closure is expected to happen shortly beyond the early termination date.

In a letter of April 26, ICICI has already informed TNEB that the lenders of the project were ready to execute the financing documents and therefore as per Videocon officials, legally the escrow agreement still stands valid.

While expressing concern of the international and domestic lenders, ICICI managing director KV Kamath, in a letter despatched to Tamil Nadu chief secretary P Muthuswamy last week, has also requested for an early resolution of any oustanding issues in this project to enable the lenders proceed further.

Kamath has communicated to the state government that the lenders to this project have spent over two years of sustained efforts to enable the project reach this advanced stage and any uncertainty at this stage will evoke concerns in all projects financiers, both doemstic and international.

As per ICICI, Videocon project has already recieved final approvals from all the lenders, including the export credit agencies (ECAs) and international banks.

"Videocon Power's North Chennai-II is the first IPP which has recieved all approvals from the international lenders on a `project finance' basis which is a significant step forward towards financing of IPPs in India", adds Kamath in his letter.

It may be mentioned here that Crisil Advisory Services, has recently submitted a confidential report to TNEB on tariff computation for the MoU/internationally competitive bid power projects in Tamil Nadu. Based on Crisil's report, TNEB has taken a decision to cancel Videocon power project's escrow and re-allocate it other projects including the 500 mw lignite based Jayamkondam project of Reliance Power.