UPSERC issues notice to Lanco for capacity change

Lucknow: The Uttar Pradesh State Electricity Regulatory Commission (UPSERC) has issued notice to Lanco Anpara Power Pvt Ltd on a petition challenging the change in capacity of the Anpara C thermal power project from 1,000 Mw to 1,200 Mw. The project, located in Sonbhadra district, is already behind schedule by eight months.

Lanco Infratech, another Lanco Group company, was in the news in 2007 when the 4,000-Mw ultra-mega power project at Sasan in Madhya Pradesh was taken away from it for allegedly flouting bid conditions.

Lanco's application for increase in the capacity was approved by the UP government on August 20, 2007. However, in its order, the state government had said that Lanco would need the power regulator's approval to increase the capacity. But the application seeking permission from the regulator was moved by Uttar Pradesh Power Corporation Ltd (UPPCL).

The regulator asked the UPPCL to submit a legal opinion whether the enhancement of the capacity would be lawful. The UPPCL, instead of replying to the regulator's query, decided to withdraw the petition seeking increase in the capacity.

In a petition to the power regulator, the petitioner, Arvind Kumar Singh, a Samajwadi Party MLA, has sought quashing of the award of contract to Lanco Anpara Power Pvt Ltd. The petitioner has also asked the regulator to issue directions to invite fresh bids for the revised capacity or alternatively, direct Lanco to reduce the tariff by 20 per cent.

UPSERC member (generation) RD Gupta said the petitioner had been directed to serve a copy of the petition to the respondents within 15 days. The respondents are the UP government, UP Power Corporation Ltd, UP Rajya Utpadan Nigam Ltd and the two unsuccessful bidders for the Anpara C project — Reliance Power Ltd and Essar Power Ltd.

'The regulator will decide on the admissibility of the petition after hearing all the parties,' said Gupta, adding: 'We will not permit any change in time frame for completion of the project. If Lanco fails to meet the deadline of commissioning the project, the regulator will impose penalty according to the contract.'

The Anpara C project, touted as the first thermal power project to be awarded on tariff-based competitive bidding, was won by Lanco Kundapalli after outbidding Reliance Energy Ltd and Essar Energy Ltd in June 2006. The company won the contract by quoting the lowest price of Rs 1.91 per unit for the power to be generated at Anpara C.

The Letter of Acceptance was issued to the company on September 26, 2006, during the previous regime of Mulayam Singh Yadav. According to the contract, the company is required to complete the project within 39-42 months of the issue of Letter of Acceptance, i.e. by early 2010.