Gadkari scraps PPA with state power company | india | Hindustan Times
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Gadkari scraps PPA with state power company

Nitin Gadkari signs a fresh memorandum of understanding (MoU) with the Reliance Energy Trading Limited (RETL) for supplying 22 MW power, reports Pradip Kumar Maitra.

india Updated: Jan 30, 2007 17:51 IST

In an unusual move, the Purti Sakhar Karkhana Limited, headed by the state BJP president, Nitin Gadkari, cancelled its earlier power purchase agreement (PPA) contract with the state electricity board, and signed a fresh memorandum of understanding (MoU) with the Reliance Energy Trading Limited (RETL) for supplying 22 MW power.

Interestingly, the power which would be purchased from Purti by the RETL would be sold out to West Bengal, despite the fact that the state was facing an acute power crisis.

Purti Sakhar Karkhana Ltd is a venture of `Sangh Parivar' and Gadkari is the chairman of the unit. Both--- Purti and Reliance-- signed a MoU in a formal function in Nagpur on Tuesday.

Gadkari signed on behalf of the power plant while Mahendra Kumar, the chief executive officer of RETL singed on behalf of the Reliance.

The initial PPA with the state electricity was at the rate of Rs 3.05 per unit while Purti will now get Rs 4.11 per unit from the Reliance. "We will now earn at least Rs 1.5-crore more every month due to the fresh agreement," informed Gadkari.

"We have signed a fresh MoU with the Reliance because it has given a competitive offer for purchase of power," he justified while scrapping of the PPA of state electricity board.

The canceling of PPA of the state electricity board and singing a fresh MoU with the Reliance was possible due to the new act of Parliament that has allowed free trading of power.


Sudhir Diwe, the managing director of Purti rued that the state electricity board was ready to purchase power from outside at an exorbitant price, but it always refuse to give better price to local entrepreneurs ; and hence Purti made a fresh contract with Reliance after getting a competitive offer.

However, Purti even did not bother to inform the state electricity board about its new decision to sign a fresh agreement with the Reliance.

The 22 MW Cogeneration project in Purti Sakhar Karkhana will be the biggest co-gen plant in sugar industries in the state.

Project commissioning trials are in progress and it is expected to commission by middle of this month.

Bagasse will be the major fuel which is available from Purti's sugar plant that is producing bagasse as the bio-product material from sugar cane.

Purti also intends to set up a 500-MW thermal power plant with the help of Hindustan Construction Limited at its present site, Bela in Nagpur district, soon.

The company has already identified the land, near the present site, and is in the advanced stage of development of the project. It has already applied for a virgin coal block at Lohara in neighbouring Chandrapur district.

"If everything goes well, the proposed plant is scheduled to be commissioned by the end of 2010," Gadkari further informed.

Email Pradip Maitra: pradipmaitra@hindustantimes.com