EdF may rejoin Bhadrawati project

Sources informed that a high level meeting is taking place this month end, where the project promoters including top brass of Alstom Power from Europe would be meeting Mittals to discuss the future course of action. EdF has, however, refused to be part of this meeting till these agreements are signed, sources said.

As per sources, during Mahajan8217;s visit, EdF had stated that inordinate delays in getting clearances from various authorities along with lack of proper commitment to escrow arrangements and a viable coal supply agreement had forced them to move out of the project after waiting for as many as seven years.

The ministry of power has recently announced that the hurdles related with coal supply and escrow have been resolved and the two agreements will soon be finalised.

However, EdF has reportedly told Mahajan that these assurances were there even before and now its future course of action will depend on how fast these two agreements are signed.

Sources said that once these agreements are in place, it is also likely that Alstom Power may increase its equity stake. This could be another issue which Alstom Power executives from Europe may discuss with Mittals during their current visit to India. However, no confirmation was recieved from Alstom Power India over this issue.

Under the coal supply arrangement with the promoters it was decided that Western Coalfields Limited WCL would supply full quantity of coal of 4.5 million tones per annum. For this it was also agreed to transfer coal linkage of Ramagundam Stage III project of NTPC of around 2.5 MT per annum from WCL to this project and supplying 2 MT per annum coal from the mines earlier allotted.

It was in a recent meeting of the power ministry officials with senior coal ministry and MSEB officials, when major pending issues related to coal pricing and escrow were settled.

EdF, which held a 15.2 per cent stake in Bhadrawati, was also the Oamp;M contractor for the project. The main disagreement was over the coal pricing which has been taken care of.

A coal price of Rs 1600 per tonne has finally been settled and accepted by both parties including the developers and Coal India Limited, the suppliers of fuel to this project.

While the developers had earlier insisted that they would buy coal only at the rate of Rs 1400 per tonne, CIL was not ready to bring down the coal prices below Rs 1800 a tonne. However, a compromise has been made by both parties and a mid value of Rs 1600 a tonne has been agreed upon.

Another issue delaying the project was lack of escrow cover from MSEB which made the centre8217;s counter guarantee invalid. As per power ministry offocials, even this issue has been resolved as the MSEB has agreed to give escrow cover to this project.