KPCL told to pay up Rs 226 crore for Bidadi plant delay

Project meant to supply peak-hour power to B'lore
Last Updated 29 September 2014, 19:54 IST

The State government may have to pay a heavy price for delay on its part in implementing its first gas-based power plant at Bidadi near here. 

The Gas Authority of India Ltd (GAIL), a public sector undertaking of the Union government, has turned down the Karnataka Power Corporation Ltd’s (KPCL) request to waive gas transmission charges by modifying the Gas Transmission Agreement (GTA) that was signed for implementing the Bidadi project. The KPCL was supposed to start utilising the gas under the project by December 2013.

With the proposed project failing to take off as scheduled, the KPCL may have to pay up Rs 226 crore a year to the GAIL as transmission charges, as per the GTA, official sources said. 

The KPCL signed the GTA with the GAIL in February 2013, soon after commissioning of the Dabhol-Bidadi gas pipeline project. 

The GAIL has already laid down infrastructure for supplying gas to the proposed Bidadi plant, as per the GTA, the sources noted. 

The KPCL, a fully owned subsidiary of the government of Karnataka, has proposed to instal a 1,400-megawatt combined gas cycle plant at Bidadi at about Rs 3,750 crore. 

The KPCL had signed the GTA with the GAIL for supply of 2.1 million standard cubic meter per day of natural gas for the project. The KPCL had agreed to finalise the capacity tranche before December, 2013, and not later than October, 2015. But the tender process started by the KPCL for the project ran into legal hurdles, causing the delay in implementation. 

The KPCL plans to allocate the entire power generated at the proposed Bidadi project to the Bangalore Electricity Supply Company (Bescom) as the plant is close to the load centre. This, if done, will ensure adequate supply of power to meet the peak-hour demand in Bangalore, the sources said. 

The KPCL wanted the GAIL to refix the date of finalising the capacity tranche (the date from which utilisation of gas will start) before January 31, 2014, and not later than October 1, 2016, but the proposal was rejected. 

The GAIL is understood to have informed the KPCL that it would consider waiving transmission charges due to it for the year 2013 if earnest efforts are made to utilise the available gas at the earliest as per the GTA. 

Yelahanka plant 

Accordingly, the KPCL has decided to expedite the implementation of the proposed 350 MW Yelahanka gas-based generation plant. It has decided to entrust the project to the Bharat Heavy Electricals Ltd (BHEL) on a Memorandum of Understanding (MoU) basis, instead of the cumbersome tender process.

The KPCL had once again approached the GAIL to modify the GTA, assuring that the Yelahanka project will be commissioned at the earliest. 

The GAIL has only informed the KPCL that the GTA related to Bidadi can be used for the Yelahanka project and there is no need to sign a fresh GTA. But it has remained silent on the payment of gas transmission charges due to it, sources said. 

The KPCL managing director, Ritesh Kumar Singh, said he was aware of the GTA with the GAIL and the transmission charges owed by the KPCL. “Implementation of the Bidadi project has been delayed due to legal problems. We are taking appropriate steps as far as the payment of transmission charges is concerned,” he said. 

According to Singh, the KPCL is waiting for environmental clearance from the Union government for the Yelahanka plant. The MoU will be signed with the BHEL to implement the project after obtaining environmental clearance, he added. 

(Published 29 September 2014, 19:54 IST)

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