Financial Daily from THE HINDU group of publications
Monday, Feb 04, 2002
Financial Daily from THE HINDU group of publications Monday, Feb 04, 2002 |
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Industry & Economy
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Power Government - States KPTCL unable to make full payment to IPPs C. Shivkumar
BANGALORE, Feb. 3 FACED with a severe cash flow situation, the State-owned utility the Karnataka Power Transmission Ltd (KPTCL) has deferred payment of fixed charges to some of the independent power producers (IPP) in the State. Sources said here that along with the variable charges, only the operation and maintenance (O&M) charges were being paid out to the IPPs. O&M is part of the fixed charges. Payments on certain other components of fixed charges, which include return on equity, had been deferred till March-end this year when cash flows were expected to improve, the sources said. The companies affected by the deferral include the four IPPs operating in the State -- the Tanir Bhavi Power company, which is running a naphtha- based 200 MW barge mounted power project, Jindal Thermal Company which has earmarked 130 MW for the State grid, the 81 MW liquid fuel station operated by the Tata group in Belgaum and the 28 MW Rayalseema Power in Bellary. Barring the Jindal group's project, the remaining three have opted for the two-part tariff, segregating into fixed and variable charges. In the case of purchases from Jindals, the tariff is on a single part basis. For these payment delays, the power purchase agreements with IPPs provide for penal charges. But the sources said the penal charges were unlikely to be imposed in view of the fact that the entire variable charges are being paid by the KPTCL. Besides, all these stations are already operating at peak plant load factor in view of the current power deficit situation. The sources said that the total revenue receipts projected for the current financial year were in the region of Rs 6,657 crore. Of this Rs 4515 crore was from sale of power, estimated at 18665 million units. The weighted average sale receipts for the KPTCL is currently in the region of Rs 1.90 unit. In addition subsidy payment due from the State Government was expected to be Rs 2300 crore. KPTCL, the sources said, still needed to receive close to about Rs 700 crore more from the State Government. The revenue expenditure estimated for the current year was in the region of Rs 6,566 crore of which Rs 4,713 crore was estimated for power purchases from the State-owned utilities, central generating stations and the independent power producers. The purchase costs after correction for transmission and distribution losses is about Rs 2.51 a unit. This tariff is after estimating a loss of 9,722 million units on the basis of 35 per cent transmission and distribution losses. In reality, however, the losses are on a still higher side, closer to about 40 per cent. Further given the deficit situation, the expenditure on power purchase has already been overshot the estimates. This was on account of the reliance on high cost power from non-hydel sources.
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