Describing the situation as "highly critical", IL&FS has demanded that NEA move at a faster pace so that a Power Purchase Agreement (PPA) can be signed within a few days for power purchase at IRs 3.25 per unit for a period of 15 years. The TL is vital as it will also facilitate import of power by India from Nepal by 2012-13.
“The PPA is critical as it decides the necessity of the TL,” Anand Kumar Jha, country representative of IL&FS, said adding, “Timely decision is desired as the delay caused from NEA´s side is hindering the progress of the project.”
IL&FS is still awaiting an Environmental Impact Assessment (EIA) which it is said will be completed only in mid-August. The EIA has been pending for one and half years now.
Expressing dissatisfaction over the delay, Jha said it is true that both IL&FS and the Power Trading Corporation of India are becoming impatient. “NEA may never get the deal in such a low price in future. If decisions are not made now, NEA will lose out,” he said.
All this comes at a time when NEA is come under tremendous pressure from India.
Jha informed that IL&FS has completed the Detailed Project Report (DPR) and at present “structuring is taking place”, which involves financial closure, determining the equity ratio and other things.
NEA, on the other hand, has blamed IL&FS for its inability to generate funds for taking the project ahead and for setting conditions for the completion of the project. “IL&FS is having financial problems and is seeking a guarantee from NEA for completion of the project. This is unacceptable as NEA is not financially strong,” an NEA official told myrepublica.com.
The official added that all responsibility for generating funds had to be borne by IL&FS.
Jha, however, denied that his company is facing financial problems. “We have no financial constraints and the project is going on,” Jha said.
IL&FS is promoted by the Central Bank of India (CBI), the Housing Development Finance Corporation Limited (HDFC) and Unit Trust of India (UTI). Over the years, IL&FS has broad-based its shareholding and inducted institutional shareholders including State Bank of India, Life Insurance Corporation of India, ORIX Corporation -- Japan and Abu Dhabi Investment Authority.
The organization has focused on commercialization and development of infrastructure projects and creation of value added financial services.
akanshya@myrepublica.com
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