Gujarat government seeks SC’s direction for PPA changes

The Gujarat government has approached the Supreme Court seeking to amend the PPAs of Tata Power Company Limited, Essar Power Limited, and Adani Power Limited based on the high-powered committee’s (HPC) recommendations. The HPC, appointed by the Gujarat government in July 2018, has submitted its report to Gujarat Urja Vikas Nigam Limited, recommending a revision in the tariff structures of the PPAs for three stressed projects – Adani Power’s 4,620 MW Mundra TPP, Tata Power’s 4,000 MW Mundra UMPP, and Essar Power’s 1,200 MW Salaya TPP. The HPC has recommended a reduction in the fixed charges by Re 0.20 per unit, which would necessitate banks to reduce debts by Rs 42.4 billion for Tata Power, Rs 38.21 billion for Adani Power, and Rs 2.324 billion for Essar Power. It also suggested that developers bear all the past losses from these projects. It must, however, be noted that the Supreme Court had disallowed any pass-through of the cost of coal on tariffs for the companies in an earlier judgment passed in April 2017.

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