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The GMR power plant at Tanir Bhavi near Mangalore.

Mangalore , July 21

THE Tanir Bhavi Barge Mounted Power Project (TBPP) here is now set to cruise to a comfortable position after the company was able to recover the cost of power supplied to KPTCL for the last two years through invoking the escrow cover.

According to the senior director of the company, Mr M.V. Subba Rao, escrow cover was necessary to continue supplying power at the prevailing rates.

Addressing a press conference here, Mr Rao said the bone of contention with KPTCL was the base load station which would give full capacity production and transmission at 220 MW.

Currently, the plant has been treated by KPTCL as a peaking load station which has resulted in KPTCL restraining production anywhere from 40 MW to 220 MW due to which the company was undergoing losses and heavy maintenance expenses.

The TBPP which will meet KPTCL, KERC and Government shortly will stake its claim to extend the PPA from 15-30 years, including the two years of PPA it has already used up.

Mr Rao said if the Government extends the PPA, the company will be able to bring down the cost per unit from 30-34 paise.

If the PPA was extended by another 15 years, the cost could come down to 22-28 paise. He also hinted that the company would be staking its claim with the Government to treat it on par with the conditions that was enjoyed by the Raichur Thermal Power Plant.

Mr Rao stated that though the situation cannot be called `happy' the company did not have any major income outstanding from the KPTCL as the proceeds of the arbitration had been favourably awarded to the company, which was continuing to get its share from the escrow cover which has proved beneficial.

Operationally, there were some problems as KPTCL was not able to remove the inconsistency in the demand load despatch, he said.

Due to the varying load despatch demand from anywhere from 40 MW to a peak of 220 MW, the company was incurring losses, he said.

He said the company had to restore certain vital parts in the machinery twice at a cost of Rs 12 crore.

He said the Tamil Nadu Electricity Board already has such a mechanism where the demand load despatch was constant to the independent power producers.

GMR Vasavi also has a power project in operation in that State, Mr Rao added.

Outlining expansion programmes, Mr Rao stated that the company was looking at an additional generation of 110 MW and the survey made by Tata Consultancy Services had given the feasibility report and the TBPP board was examining the proposal.

He said TBPP would benefit from the expansion as the existing infrastructure would serve as investment on infrastructure for the expansion plans.

By investing an additional Rs 28-30 crore, the company would be able to take up the value of the existing project by 25 paise per unit, whichwould be still cheaper than many of the producers, he added.

The additional power plant would, however, be land-based, he added.

He said such provisions were there in the new Electricity Act and the existing PPA would be re-negotiated with the Government under the light of the new act, Mr Rao stated.

He said the expansion plans, however, would be examined on gas-based production and talks were on with the Cochin Petronet to make available the gas pipeline. Reliance was also studying the possibility of drawing a pipeline from Vishakapatnam to Mangalore, he added.

Mr Rao stated that the company has been recently awarded the ISO 14000 certification for emission control standards.

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