AP claims UMPP project heading nowhere, CEA team visits to take stock

The much-publicised 4,000-Megawatt Krishnapatnam ultra mega power project (UMPP) appears to be heading nowhere.

A team of Central Electricity Authority (CEA) today visited the project site to verify a state energy department claim saying there was no progress on the ground as envisaged in the project time lines.

The project was awarded to Anil Ambani's Reliance Power in January 2008 and achieved financial closure in July 2010. The total cost is estimated at Rs 17,500 crore.

A state government source said the department was worried because all work at the project site was stalled and Andhra Pradesh needed the 1,600 Mw promised from the project at Rs 2.33 per unit.

When contacted, a senior government official said the CEA had deputed the team after it was apprised of the ground situation by the government. The team headed by chief engineer M S Puri will submit its report to the authorities after reaching Delhi.

According to the project schedule, the first 800 Mw super critical thermal power unit has to be commissioned by September 2013 and the remaining part by October 2015.

However, the company in its presentation to the CEA, had raised several issues obstructing the project, including a Indonesian government regulation that prohibits the sale of coal at a rate lower than the market price. The Indonesian government had fixed a base price for coal to complement the new tax rules. coal from Indonesia is the sole source of fuel for the project.

Reliance Power said other problems such as absence of rock strata after drilling 60 metres, presence of marine sand at he site — contrary to the reports given by the Power Finance Corporation (PFC) and not highlighted in the detailed project report — high port charges at Krishnapatnam port, were plaguing the company.

The company also said it had not received approval for a jetty and that port developers were objecting to the sea water intake system that needs to be set up for the project within the port limits. It said there were delays in granting exemptions, including handing over of the balance 77 acre land by the state government even after making repeated requests.