Mundra Project: Centre Willing To Play Mediator Between Tata Power And Gujarat
The government would facilitate a discussion among all the stakeholders: Goyal
The central government is willing to play facilitator to a possible deal between Tata Power Ltd. and the Gujarat government, if the state does decide to go ahead with a proposal made by the company, Union Power Minister Piyush Goyal told BloombergQuint on Thursday.
The power producer has proposed to sell 51 percent stake in its Mundra Ultra Mega Power Project for a token amount of Re 1.
“Tata Power has written to the state (Gujarat) government and I have also received a representation from them, but this is really a matter for states, procurers and the companies to sort out,” said Goyal. “But as a responsible government, Centre is willing to play the role of a facilitator to bring all the stakeholders on one table.”
Also Read: Port City Of Mundra Is Losing Its Mojo
He cited the Teesta project where the Union government had played mediator. “For Teesta, we were able to solve the issue where Rs 9,000 crore were invested but the project was stalled. Our approach in this matter is that the ultimate goal of common man getting low cost power,” he said.
Tata Power’s Offer
Gujarat Coastal Power Ltd. (GCPL), a subsidiary of Tata Power, had written a letter to Gujarat Urja Vikas Nigam Ltd., one of the largest power purchasers from the Mundra plant, proposing to sell majority stake in the company to the state corporation.
In the letter, copies of which were marked to Nripendra Misra, Principal Secretary to the Prime Minister, and Union Power Secretary, CGPL CEO Krishna Kumar Sharma said Mundra has accumulated losses of Rs 6,457 crore against a paid-up capital of Rs 6,083 crore. The project has outstanding loan of Rs 10,159 crore and lenders have stopped further disbursal due to non-viability of the project, he added.
The Tata Group company had won a bid for the 4,000-megawatt Mundra project in Gujarat, in 2006, after it quoted the lowest tariff of of Rs 2.26 for every unit of electricity generated. It would also be one of the first power plants in the country which would run on only imported coal from four mines owned by the Tata Group in Indonesia.
In 2010, the Indonesian government said coal could only be exported from the country at prices linked to prevalent international rate. Tata, in turn, sought higher tariffs for power, but the plea was rejected by the Supreme Court.
Tata Power’s Mundra project, comprising five units of 800 MW each, was commissioned between 2012 and 2013. It has signed a 25-year agreement to sell electricity to utilities in Gujarat, Rajasthan, Maharashtra, Haryana and Punjab. Gujarat is the lead buyer.
(With inputs from PTI)