BANGALORE, DEC 15: Six days after abruptly announcing their pullout from the 1,000 mw Mangalore power project, sponsors, Cogentrix today indicated that they would consider revival of the project on fulfillment of certain conditions.Ron Somers, Managing Director of the Mangalore Power Company, a subsidiary of Cogentrix and Hong Kong-based China Light and Power Company, told reporters here that he would recommend to the sponsors revival of the 1.3 billion dollar fast track project if Karnataka government stood by the 1997 Power Purchase Agreement (PPA) and the Union Power Ministry gave the draft of the Counter-Guarantee (CG) without delay.After a meeting with the Chief Minister S M Krishna, Somers said the company had made a request to the State Government and the Union Power ministry to send the necessary signals to the boards of Cogentrix and China Light and Power that there was a commonality of will and interest on the part of the government to put the project back on the "fast track".He said theSupreme Court verdict of December 13 setting aside High Court order for CBI probe into alleged kickbacks had resolved only one of the three outstanding issues, adding, the other two related to CG and PPA.Asked how long the board was ready to wait for the draft of the CG, Somers said it was for the boards to decide.He also made it clear that the board's December eight decision to pull out of the project was "firm" and its "exit strategy is already on."However, terming his meeting with Krishna as "productive", Somers said "only he (Krishna) can salvage the project".According to Ron Somers, now the ball is in Krishna's court and the latter had to stand by the Power Purchase Agreement (PPA) which was entered with the erstwhile Karnataka Electricity Board in August 1997. Maintaining that the meeting with Krishna on Wednesday morning was "productive", Somers said though Krishna had not made any firm commitment, he had assured to discuss the issue with his cabinet colleagues before announcing the government'sstand. However, Somers said the chief Minister has asked the Chief Secretary to begin feasibility study in view of the developments. Stating that he was optimistic of the project, Ron Somers said Krishna who was the champion of the project as State power minister in the past, was very keen on the project.He hoped that the governments both in Karnataka and at the Centre would send necessary signals to the effect that they were truly interested in salvaging the important infrastructure project. "After contd on pg 2seven and a half years of hearing the same old story, time-bound commitments to resolve all outstanding issues must be given by the Centre and the State before I could recommend reconsideration of the decision", Somers said observing that "it is now the government's turn to demonstrate follow-through and commitment. Such large infrastructure projects stand no chance of success unless there is sufficient political will and interest to move them forward".He mentioned that the Power PurchaseAgreement (PPA) approved and executed by the state government in November 1997 after full three years of negotiations complied with the Government of India and the Indian Electricity Supply Acts of 1910 and 1948 (amended). The MPC has requested the government's confirmation of it's commitment to abide by the terms and conditions of the executed contract.The Union Cabinet had cleared "in principle" counter guarantee for the project in October 1996 itself and even the Union Power Ministry had agreed to issue the counter guarantee upon a favourable decision by the Supreme Court, Somers reminded.Replying to a question, he said there was no question of re-negotiation of the PAA and he claimed that the levelised tariff of power fixed at Rs.2.51 per unit by the PPA was the cheapest among the projects approved by the Union government.Somers said his company had been developing the project in good faith and earnest for the past seven and a half years and it was now for the governments to revive such aproject."After seven and a half years of hearing the same old story, time-bound commitments to resolve all outstanding issues must be given by the Centre and the State before I could recommend reconsideration of the decision", Somers said observing that "it is now the government's turn to demonstrate follow-through and commitment. Such large infrastructure projects stand no chance of success unless there is sufficient political will and interest to move them forward".He mentioned that the Power Purchase Agreement (PPA) approved and executed by the state government in November 1997 after full three years of negotiations complied with the Government of India and the Indian Electricity Supply Acts of 1910 and 1948 (amended). The MPC has requested the government's confirmation of it's commitment to abide by the terms and conditions of the executed contract.The Union Cabinet had cleared "in principle" counter guarantee for the project in October 1996 itself and even the Union Power Ministry had agreedto issue the counter guarantee upon a favourable decision by the Supreme Court, Somers reminded.Replying to a question, he said there was no question of re-negotiation of the PAA and he claimed that the levelised tariff of power fixed at Rs.2.51 per unit by the PPA was the cheapest among the projects approved by the Union government.Somers said his company had been developing the project in good faith and earnest for the past seven and a half years and it was now for the governments to revive such a project.The ConditionsKarnataka should stand by 1997 PPACentral govt should give the counter-guarantee without delayCentre, State should get the project back on `fast-track'Time-bound commitment to resolve all outstanding issues from both the governments
