Uttar Pradesh Power Corporation (UPPCL) has cancelled Anil Dhirubhai Ambani’s Reliance Power’s Chitrangi power project in Singhrauli and seized its bank guarantee of Rs 74 crore, as it allegedly did not fulfil its commitment of setting up the project on time.
Uttar Pradesh Power Corporation (UPPCL) has cancelled Anil Dhirubhai Ambani’s Reliance Power’s Chitrangi power project in Singhrauli and seized its bank guarantee of Rs 74 crore, as it allegedly did not fulfil its commitment of setting up the project on time. UPPCL had issued a letter of intent (LoI) to Reliance Power for the supply of 2,456 MW of power from the 3960 mw Chitrangi power project near Sasan in Madhya Pradesh, after it had emerged as the lowest bidders in a competitive bid for purchase of power by the UP government in 2011. As per the LoI, Reliance Power was to supply power to UPPCL at a leverised tariff of Rs 3.70 for a period of 25 years. According to UPPCL chairman Alok Kumar, RPower was supposed to sign the contract, but it kept on asking for extensions and hence the project could not be developed on time.
“UPPCL has been continuously striving to procure power at cheaper rates and Reliance Power should have started work on developing the project on time. This was an important project and if the project would have been completed, it would have provided 2456 MW power at Rs 3.70/unit for 25 years. But Reliance Power has not signed the contract and as a result, the state as well as UPPCL have been forced to bear heavy losses.
We could not buy cheap power from elsewhere as we kept waiting for them to sign the contract and were thus forced to buy expensive power to meet our demand. As a consequence, UPPCL has seized the group’s bid bond,” he said. It may be mentioned that the coal for the project was to be sourced from captive coal mines allocated to Sasan UMPP, which the Centre had cancelled in view of the Supreme Court’s judgements of August 24, 2014, and September 25, 2014, by which 214 coal blocks allocations were cancelled.