TNERC clears two decades-old power project.

Even before the dust settled on the botched Udangudi tender dispute, another long-pending power project in the State seems to be generating controversy.

Spic Electric Power Corporation's 525-MW thermal plant in Tuticorin, first conceived in 1996, was approved by the Tamil Nadu Electricity Regulatory Commission (TNERC) recently. But dissenting voices within TNERC have alleged that the State would incur a loss of Rs.4,500 crore over the next 30 years due to cost escalation.

Rebutting the majority decision of the commission to build the plant at a cost of Rs. 3,514 crore, TNERC Member S.Nagalsamy said: 'This project was first approved by the State way back in 1997 and it was slated to cost around Rs. 1,500 crore. Just because the company signed a contract with the government, the commission cannot keep on increasing the capital cost of the project.'

In his dissent note, he wrote, 'The significant delay, non-availability of power all these years and the resulting financial loss to the State’s power utility have to be taken into account,' he said.

'There is no justice in acceding to this request to increase cost, especially because there was no competitive tender process to begin with and the firm was 'nominated' to implement the project purely based on MoU,' Mr. Nagalsamy said. The decision to allow the private firm to increase the outlay is going to result in consumers having to pay 45 paise extra for each megawatt of power produced at the plant, he wrote. 'This translates to an excess payment of Rs. 4,500 crore over the next 30 years.'


THE HINDU