L&T wants to move away from Power generation in Punjab

L&T wants to move away from Power generation in Punjab

Kanwar Inder Singh/royalpatiala.in/ Chandigarh

Larsen & Toubro (L&T), a power giant, having coal, gas, nuclear and renewable power projects in India, has forwarded a proposal to Punjab government through Punjab State Power Corporation Limited (PSPCL) to take over its, operational  2×700 MW supercritical thermal power plant at Rajpura in the state of Punjab worth Rs 10,000 crore project.

In a letter dated July,22,20202 addressed to A. Venu Prasad, CMD, Punjab State Power Corporation Limited (PSPCL), DK Sen, Whole time Director & Senior Executive Vice President (Development Projects) said “ L&T has decided to move away from the power generation business. Ownership of operational power generating Punjab State Power Corporation Limited (PSPCL) assets such as Nabha Power Limited is not in line with the long-term business strategy of the Company.”

Sen highlighted the six years old L&T thermal power plant, built on supercritical technology of Mitsubishi Heavy Industries, Japan (now Mitsubishi Hitachi Power Systems or MHPS), first power plant with indigenously made supercritical boiler-turbine-generator to be operational in the country, achievement of supplying cost effective and reliable power to the State of Punjab and expressed company’s gratitude to the Government of Punjab for the support and assistance extended from time to time. He also pointed that “in six years, NPL has supplied 47,500 MU of power to PSPCL and has been the highest contributors to the State of Punjab”.

Sen also gave the list of awards that Nabha Power Limited have won , related to energy efficiency, energy conservation, best IPP award for three consecutive years etc. during these six years.

On the financial aspect, Sen also informed that “the company had invested Rs 10,000 crore in the project. The invested equity of L&T stands at 2688 Crore and outstanding debt as on 30 June 2020 was 7002 crore.”

Sen also offered to the CMD that “in case PSPCL wants L&T to continue operating & maintaining the plant for some time after acquisition, L&T would be happy, to submit a separate proposal in this regard.”

As per source Independent Power Producers (IPPs)  in Punjab are creating an extra burden of Rs. 1000 crore per annum in the form of fixed charges. Punjab has three private power plants owned by GVK group at Goindwal Sahib, Vedanta group Talwandi Sabo Power Limited (TSPL)  at Talwandi Sabo in Mansa and L&T group owned Nabha Power Limited (NPL) at  Rajpura and the cost of power from  these plants comes at Rs.9.54, 6.62, and 5.05 per unit respectively.

An expert and ex employee of PSPCL said “recently Nabha power Limited (NPL) has been successful in pushing their cost upwards through various court cases. Punjab is paying 1400 cr and in the recent appellate tribunal decision this cost is expected to go further, by another Rs. 3000 cr. This claims to efficiency are questionable”

Even CM had earlier said that his government would bring a White Paper to expose the “fraud committed” by the Akalis in Power Purchase Agreements (PPAs) with private players which in turn was the reason that Punjabis were being burdened with high power tariffs.The officials of L&T wants to keep themselves away from the blame game of the fraud committed by private players and came with an idea to sell the plant to the Punjab government itself and save the company’s name.

September,6,2020