MSEB takes U-turn, now opposes escrow cover

MSEB has pointed out that it would require as much as Rs 4,000-crore annually to be escrowed from the Board’s revenues for providing escrow arrangement to the Bhadravati and Reliance Patalganga projects. These sources said that the state government has already approved an escrow cover at 1.15 times of the monthly tariff payment based on the three months average payment for the Bhadravati project. As far as the Reliance Patalganga power project is concerned, the state government has cleared revenue circles equivalent to Rs 106-crore being 1.05 times of the projected monthly tariff payment at the time of commercial operation and it was earmarked for Reliance Patalganga escrow.

Earlier, MSEB and the Ispat group promoted-Central India Power Co Limited (Cipco) have agreed that the escrow protection would apply in respect of tariff, termination payments and 50 per cent of the annual Government of India counter guarantee fee.