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C. Shivkumar

One of the major reasons for the delay in the escrow curing is that the State utility is faced with a major revenue shortfall in view of the power shortage.

BANGALORE, Feb. 17

TANIR Bhavi Power Company Ltd (TBPCL) continues to draw on the escrow account for recovering its payment dues from the Karntaka Power Transmission Corporation Ltd (KPTCL).

TBPCL, promoted by the GMR Vasavi group, operates a 220 MW barge mounted power plant near Mangalore.

Sources said that TBPCL was resorting to drawing down from the escrow to meet its debt servicing payments to the domestic financial institutions led by IDBI.

These payments include $20 million as principal payment and $11 million as second-year interest dues.

Since the funding of TBPCL has been done on the basis of a project recourse basis, there was little alternative other drawing from the escrow to meet the payment obligations, the sources said.

They added that as a result, curing of the escrow cover, which should have occurred last month itself, has been delayed after being invoked in July last year.

As per the power purchase agreement (PPA) conditions, the escrow would have to maintained to the equivalent of 1.25 times of the billing amount, to the equivalent of six months' revenues.

One of the major reasons for the delay in the escrow curing is that the State utility is faced with a major revenue shortfall in view of the power shortage.

Besides, the utility has been making purchases from high cost sources to meet the shortfall.

According to the sources, TBPCL has been feeding at least 2.5 million units (MU) into the State grid to meet the shortfall in hydel availability.

But this availability from TBPCL comes at a hefty price.

At current exchange rates, the tariff is close to Rs 5 per unit.

Whatever gains had accrued to KPTCL due to appreciation of the rupee and consequent savings in fixed costs were wiped out by increases in variable costs, mainly fuel costs, the sources said.

TBPCL's plant is naphtha fired and international naphtha prices are close to about $210 a tonne on a c.i.f basis.

KPTCL is also not in a position to ask the project to back down and restrict payments to just fixed costs alone.

This is because any backing down of the plant would mean further restrictions in power consumption.

Already, the utility has restricted consumption throughout the State to just 80 MU per day, though the requirement is over 100 MU.

However, meeting this demand at the current juncture would mean sourcing the power from high-cost non-hydel sources.

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