KARNATAKA: Another ambitious project, another faltering start. Udupi Power Corporation Limited (UPCL), which is building the thermal power plant in Yelluru near Mangalore, has already run into trouble, even before the project has been commissioned.
The website of UPCL, a subsidiary of Lanco Infratech limited, says that thermal power project has achieved financial closure and that last quarter of 2009 would see the commissioning of the project. The project, however, is still to be completed.
The company, which has got the government's backing, seems to be hesitant to go fullsteam ahead. Though Unit I (600 MW) of the coal-based 1,200 MW thermal power project was synchronised with the grid in June this year, the trial runs have been a bumpy ride.
UPCL began generating 55 MW in June. The plant has since grappled with frequent breakdowns and is yet to reach optimum capacity. Officials from UPCL say delay in getting the turbine and other machinery from China is the reason behind the project not adhering to its schedule. The company had also faced charges of procuring poor-quality machine parts from China.
UPCL General Manager (Corporate Affairs) Kishore Alva say technical snags are bound to happen when there 29,999 joints in the machinery.
Sources point out that the present power lines installed to evacuate 200 MW of power from plant to national grid in Hassan are not strong enough. "Frequent tripping on 200 KVA power line at Kemmar near Karkala has disrupted the supply," said a source.
The bone of contention appears to be uncertainty over the installation of a 400 KVA line by the Karnataka Power Transmission Corporation Limited (KPTCL) to distribute power form the plant.
"The transmission corridor through Western Ghats should have been ready in April. But we cannot keep the plant idle for too long," said sources.
According to insiders, as per the agreement between the UPCL and KPTCL, KPTCL would have to pay a penalty Rs 2 crore per day for delay in setting up the transmission lines. Unconfirmed reports say the KPTCL is paying UPCL Rs 2 crore a day for the delay.
Power for whom?
Under the Power Purchase Agreements (PPA) signed with Power Company of Karnataka Limited (PCKL) - a special purpose vehicle set up by the government to facilitate commissioning of power projects and purchasing power for five Escoms - UPCL will provide 90 per cent of power generated to Karnataka and the rest will go to Punjab.
Experts in the power sector say that the purchase agreement with Punjab is not in Karnataka's interest."If the UPCL ties a power purchase agreement with Punjab, then issues related to the project will have to be dealt in Delhi at the Central Electricity Regulatory Commission," Energy expert and Mangalorebased advocate, D S Bhatt said. "If they were selling power only to Karnataka, then in case of any opposition, the hearing would have to be held in the state and public participation would be more."
Now, the promoters are unhappy because the government has remained silent on the interim tariff. They also point out to redtapism where their fresh proposal to import coal had not been cleared.
"Our present coal stock at the project site will last only for a fortnight," UPCL sources told Express.
The PCKL, on its part, says the allegations are baseless. "The payment for power purchased during the trial period is not a big issue as the government has released Rs 20 crore," a source said. The tariff was not fixed yet because the power generated by UPCL was also being distributed to Punjab, the source added.
"If the tariff needs to be fixed it should be a factor of the total capital cost. And when the total capital cost has not been made available, how should the government factor the tariff," sources said.
Polluting our fields
The farmers living near the project site say effluents discharged from the plant complex are polluting their fields. The residents of Padebettu, Ullur, Tenka Yermau and Kemmudelu had staged a protest complaining that the salt water sewage was being drained by the company to the agricultural farm instead of diverting it to the sea.
The UPCL had promised a stateoftheart facility in managing waste water - a prmise it is yet to act upon.
UPCL to get bigger
Earlier known as the Nagarjuna Power Corporation Limited, the project was set up at a cost of Rs 5,689 crore by a consortium led by Power Finance Corporation Limited. The cost of the project, initially, was estimated to be, Rs 549.5 crore. So far, setting up the first unit alone has cost Rs 429 crore. The plant is financed by a consortium of 14 banks and financial institutions led by the Power Finance Corporation Ltd.
With the Cabinet approving capacity expansion of thermal project in February, the UPCL invested an additional Rs 600 crore to enhance the capacity from 1,015MW to 1,200 MW. UPCL has also decided to add two more units and increase capacity by 2,520 MW at a cost of Rs 6,000 crore.
Coal trip
Though the UPCL is a private company, still the state energy department officials have been more than willing to help it. Some months back, ten officials made a trip to SouthEast Asia to procure coal for UPCL - all at the state exchequer's expense.