To rescue the debt-laden, loss-making business of the Mundra power project, Tata Power has offered to sell 51% stake in it for Re 1.(HT Archive)
To rescue the debt-laden, loss-making business of the Mundra power project, Tata Power has offered to sell 51% stake in it for Re 1.(HT Archive)

Tata Power offers to sell 51% stake in Mundra for Re 1

Tata Power has offered to sell 51% stake in its 4,000 MW Mundra power project for Re 1 to states like Gujarat
By Press Trust of India | New Delhi
UPDATED ON JUN 22, 2017 04:59 PM IST

Tata Power has offered to sell 51% stake in its 4,000 MW Mundra power project for Re 1 to states like Gujarat which buy electricity from it so as to rescue the debt-laden, loss-making business.

Coastal Gujarat Power Ltd (CGPL), the Tata Power unit which operates the Mundra project, wrote to Gujarat Urja Vikas Nigam Ltd earlier this month offering to retain only 49 % stake and operate the project as a contractor provided the procurers buy all the power at higher tariffs.

In the letter, copies of which were marked to Nripendra Misra, Principal Secretary to Prime Minister, and Union Power Secretary, CGPL CEO Krishna Kumar Sharma said Mundra has accumulated losses of Rs 6,457 crore against a paid up equity of Rs 6,083 crore.

Besides, CGPL has outstanding loan of Rs 10,159 crore and lenders have stopped further disbursal due to non-viability of the project, he wrote.

Tatas had in February 2006 won the bid for 4,000 MW Mundra project in Gujarat, quoting a price of Rs 2.26 for every unit of electricity generated. It had intended to fire the plant with coal imported from mines owned by the Tata Group in Indonesia.

In 2010, the Indonesian government said that any export of coal could be done only at prices linked to international rates.

Tatas, in turn, sought higher tariffs for power, but the plea was rejected by the Supreme Court.

When contacted, Tata Power said it made the suggestion after exhausting all other option.

Bankers, it said, “made a suggestion that if 51 % equity is taken over on a back to back basis with the procurers, then the procurers would have advantage of competitive power for full life of the plant e.g. 40 years” at “very low and competitive price”.

“CGPL has and will continue to be open to exploring all options, in consultation with stakeholders, for the long term sustainability and viability of the plant in the interest of all stakeholders and would continue its operations with competitive power,” the company said in a statement.

Power Minister Piyush Goyal said the company has written to the state government and it was for the procurers and the firm to sort out the issue.

“But as responsible part of the government in the country, the central government is willing to play the role of a facilitator to bring all the stakeholders on the table so that an informed, considered view can be taken,” he said.

The Centre, he said, was not “siting with blinkers or eyes closed or blindfolded”.

“We are also conscious of the issues and we will ultimately have to protect the interest of consumer so that the power tariffs through indirect route don’t increase for common man or discoms,” he said without elaborating.

Sources said CGPL in the letter stated that financial position of the company continues to deteriorate and has reached a critical situation due to substantial loses incurred.

It wanted tariffs to be negotiated or power procurers take over 51 % paid up equity shares of CGPL for a nominal value of Rs 1 and grant relief to the project by purchasing power at a rate to fully address the under-recovery of fuel costs.

In the statement, Tata Power said Mundra project is a national asset that provides close to 2 % of India’s power need.

“It is unfortunate that due to circumstances beyond the control of the company, the Mundra plant has been reeling in losses year on year.

“CGPL would continue to work towards exploring all options to stop losses and best contain the onslaught of under recovery on fuel side,” it said.

Mundra project, comprising of five units of 800 MW each, was commissioned between 2012 and 2013. It has signed a 25- year agreements to sell electricity to utilities in Gujarat, Rajasthan, Maharashtra, Haryana and Punjab. Gujarat is the lead buyer.

Sources said CGPL has stated in the letter that against the project outlay of Rs 17,900 crore, the company has an outstanding term loan of Rs 10,159 crore and an additional amount of Rs 4,460 crore which is due to Tata Power.

After the Supreme Court rejected compensatory tariff to it and similar power plant of Adani Group, CGPL made a plea with all procurers to consider afresh the issue of compensatory tariff but Gujarat Urja Vikas Nigam Ltd specifically denied the request.

CGPL has stated that it is making the offer to avoid the project being rendered unviable and eventually turning into a Non Performing Asset (NPA) or bad loan, thereby depriving the consumers of one of the lowest cost power.

SHARE THIS ARTICLE ON
app
Close
TikTok is among the 59 Chinese apps that have been banned. (File photo)
TikTok is among the 59 Chinese apps that have been banned. (File photo)

Chinese app TikTok cuts jobs in India following ban

AP, New Delhi
PUBLISHED ON JAN 28, 2021 11:33 AM IST
  • China says New Delhi has been using national security as an excuse to prohibit Chinese mobile apps.
Close
On Friday, the rupee had settled at 73.11 against the American currency. Representational image.(Getty Images/iStockphoto)
On Friday, the rupee had settled at 73.11 against the American currency. Representational image.(Getty Images/iStockphoto)

Rupee falls 21 paise to 73.13 against US dollar in early trade

PTI, Mumbai
PUBLISHED ON JAN 28, 2021 10:45 AM IST
At the interbank forex market, the domestic unit opened at 73.13 against the US dollar, registering a fall of 21 paise over its previous close.
Close
HDFC Bank and Housing Development Finance Corp were the top drags to the Nifty 50 index, falling 2.5% and 2.2%, respectively.(Bloomberg)
HDFC Bank and Housing Development Finance Corp were the top drags to the Nifty 50 index, falling 2.5% and 2.2%, respectively.(Bloomberg)

Shares slump to over one-month low as banks slid

Reuters, Bengaluru
PUBLISHED ON JAN 28, 2021 10:05 AM IST
Shares of Axis Bank dropped as much as 2.6% after its third-quarter profit slumped due to a surge in provisions for bad loans
Close
Representational image. (REUTERS)
Representational image. (REUTERS)

Delhi HC to hear Amazon plea to detain Future Group founders today

PUBLISHED ON JAN 28, 2021 09:37 AM IST
In its plea, Amazon has sought enforcement of the Singapore arbitrator’s ruling in October against its partner Future’s 24,713 crore deal with Reliance
Close
Sensex opened in red on Thursday. (PTI Photo)
Sensex opened in red on Thursday. (PTI Photo)

Indian shares slump to over one-month low as banks slide

By hindustantimes.com
UPDATED ON JAN 28, 2021 09:58 AM IST
The blue-chip Nifty was down 0.82% at 13,853.25 by 0347 GMT, after falling as much as 1.2% to its lowest level since Dec. 24. The benchmark Sensex slid 0.92% to 46,973.28.
Close
Tesla has given the cars all-new interiors, with updated screens and climate controls.(AP File Photo )
Tesla has given the cars all-new interiors, with updated screens and climate controls.(AP File Photo )

Tesla’s Model S Plaid is fastest-accelerating production car

Bloomberg
PUBLISHED ON JAN 28, 2021 06:22 AM IST
Tesla says Model S Plaid is capable of 0-60 in less than 2 seconds, claiming in the earnings presentation that it’s the fastest-accelerating production car in the world.
Close
Union minister for information and broadcasting Prakash Javadekar said the MSP of milling copra is higher by 52 per cent than the production cost, while the support price of ball copra is 55 per cent higher.(iStock/HT Archive)
Union minister for information and broadcasting Prakash Javadekar said the MSP of milling copra is higher by 52 per cent than the production cost, while the support price of ball copra is 55 per cent higher.(iStock/HT Archive)

Cabinet clears hike in MSP for Copra

By HT Correspondent, Hindustan Times, New Delhi
PUBLISHED ON JAN 28, 2021 06:16 AM IST
  • Copra is the dried coconut kernel from which coconut oil is pressed.
Close
Speaking at a news conference, Powell made clear his belief that the economy will struggle in the coming weeks and months, until widespread vaccinations and government rescue aid eventually fuel a sustained rebound.(Reuters File)
Speaking at a news conference, Powell made clear his belief that the economy will struggle in the coming weeks and months, until widespread vaccinations and government rescue aid eventually fuel a sustained rebound.(Reuters File)

Federal Reserve stresses its commitment to low rates as US economy stumbles

AP, Washington
PUBLISHED ON JAN 28, 2021 05:58 AM IST
The Fed said in a statement after its latest policy meeting that hiring and economic growth had slowed, particularly in industries affected by the raging pandemic, notably restaurants, bars, hotels and others involving face-to-face public contact.
Close
Apple, the biggest U.S. listed public company by market capitalization with a value of $2.4 trillion, has thrived through a pandemic that forced it to shutter many of its stores but prompted many consumers to buy or upgrade devices.(Reuters)
Apple, the biggest U.S. listed public company by market capitalization with a value of $2.4 trillion, has thrived through a pandemic that forced it to shutter many of its stores but prompted many consumers to buy or upgrade devices.(Reuters)

Apple sees revenue growth accelerating after setting record for iPhone sales

Reuters
PUBLISHED ON JAN 28, 2021 05:51 AM IST
Apple shipped its iPhone 12 lineup several weeks later than usual, but an expanded number of models and new look tapped pent up demand for upgrades, especially in China.
Close
Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US.(Reuters File Photo )
Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas US.(Reuters File Photo )

Joe Biden drilling ban leaves majority of US production untouched

Bloomberg
PUBLISHED ON JAN 28, 2021 05:37 AM IST
For the oil market, Biden’s restrictions on the energy industry, a focus on fiscal spending and a probable lack of urgency in lifting sanctions on Iran may actually help support crude prices this year and the next, Goldman Sachs Group Inc. said last week.
Close
The development marks a distinct shift in the telecom operator’s strategy, announced soon after the Supreme Court (SC) in September extended a deadline to repay outstanding regulatory dues in a staggered manner.(Reuters)
The development marks a distinct shift in the telecom operator’s strategy, announced soon after the Supreme Court (SC) in September extended a deadline to repay outstanding regulatory dues in a staggered manner.(Reuters)

Vodafone Idea plans QIP, shelves debt fundraising

By Ishita Guha, Anirudh Laskar, Livemint, Mumbai/new Delhi
UPDATED ON JAN 28, 2021 07:28 AM IST
  • Change in investor sentiment, company’s prospects said to be behind move.
Close
The BSE Sensex fell 937.66 points, or 1.94%, to 47,409.93. The National Stock Exchange’s broader Nifty index shed 1.91% to 13,967.50.(Bloomberg )
The BSE Sensex fell 937.66 points, or 1.94%, to 47,409.93. The National Stock Exchange’s broader Nifty index shed 1.91% to 13,967.50.(Bloomberg )

Markets tank as bears dig in, FIIs rush out

By Nasrin Sultana, Livemint, Mumbai
PUBLISHED ON JAN 28, 2021 03:51 AM IST
  • Concerns around elevated valuations of stocks may have also triggered the fall, analysts said.
Close
Family members of a migrant labourer on foot walking from Delhi to their native place spotted on Delhi-Kolkata NH 2, during the nationwide Covid-19 lockdown, in Dhanbad. (Chandan Paul/Hindustan Times)
Family members of a migrant labourer on foot walking from Delhi to their native place spotted on Delhi-Kolkata NH 2, during the nationwide Covid-19 lockdown, in Dhanbad. (Chandan Paul/Hindustan Times)

The poorest have been worst hit by pandemic

By Paaritosh Nath, S Nelson Mandela, Aishwarya Gawali, New Delhi
UPDATED ON JAN 28, 2021 07:27 AM IST
  • Azim Premji University carried out a lockdown survey in April and May of 4,942 workers. Six months later (September-November), we revisited the same workers and managed to interview 2,778 of them.
Close
As per the RBI Act, 1934, the Centre, in consultation with RBI, has to finalize the inflation target for the next five years starting 1 April and also get it passed by Parliament. ( Ramesh Pathania/Mint Archives)
As per the RBI Act, 1934, the Centre, in consultation with RBI, has to finalize the inflation target for the next five years starting 1 April and also get it passed by Parliament. ( Ramesh Pathania/Mint Archives)

Govt mulls 5% inflation goal to give RBI room to trim rates

By Rajeev Jayaswal, Hindustan Times, New Delhi
UPDATED ON JAN 28, 2021 04:52 AM IST
  • The proposal will be announced along with other fiscal measures in the Budget for FY22 aimed at reviving growth, two persons aware of the development said.
Close
Gopinath, in response to a question on the new farm laws, said: “These particular farm laws were in the area of marketing."(File photo)
Gopinath, in response to a question on the new farm laws, said: “These particular farm laws were in the area of marketing."(File photo)

India’s new agri laws have potential to raise farm income: IMF's Gita Gopinath

PTI, Washington
PUBLISHED ON JAN 27, 2021 11:24 PM IST
There are multiple areas where the reforms are needed, including infrastructure, the Chief Economist of the Washington-based global financial institution said on Tuesday.
Close
SHARE
Story Saved
OPEN APP