Gujarat government set up a three-member committee having former Supreme Court judge Justice RK Agarwal, former Deputy Governor of the Reserve Bank of India SS Mundra and former Chairperson of the Central Electricity Regulatory Commission (CERC), Pramod Deo on July 3, 2018 to find solutions for the thermal power plants in Gujarat. Three thermal power plants in the state were in terrible crisis.
This government appointed high-powered committee prepared a draft report that suggested a plan to rescue stranded power projects in the state run by the Adani, Essar and Tata groups. These power plants used coal for the power production which was imported by Indonesia. Since Indonesia increased its fuel prices, the companies failed to obtain a tarrif revision to cover the cost. Supreme Court had ruled this out in a judgement in April 2017. However, the plants had reduced electricity generation remarkably that had affected the power supply in Gujarat and other states leading to a power crisis.
Newsclick has obtained a draft copy of the entire report of 110 pages that is marked as ‘privileged and confidential’ and ‘work in progress draft’. According to the draft, prepared by the high-powered committee the burden of hardships is supposed to be borne by all the stakeholders including developers, lending banks and consumers. This will include all the losses drawn by them and that will not be compensated by the company.
Distressed with the huge loss, the three companies had earlier offered to sell a 51 per cent stake in their plants for Rs 1 to the Gujarat State Electricity Board (GSEB) in 2017, but seeing the state assembly election nearing, the government refused to take any decision till the election period gets over.
However, the high powered committee gave them relaxation which helped companies to continue to have the assets. As a result, the lending banks will be expected to reduce their debt burden on the projects to the tune of more than Rs 9,000 crore.
Tata Power, Adani Power and Essar Power had a combined capacity of more than 9,800 MW. The Supreme Court judgement had also denied any permission to charge higher tariffs from the electricity consumers. Nevertheless, consumers are expected to be laddened by the load of the increased price of the Indonesian coal.