TNEB cancels Videocon escrow

The commpany took its time to revise the financial package of the project. In the meantime, the time limit for escrow cover given by TNEB had expired and the company sought a further extension of escrow for the project.

It is now learnt that TNEB has decided to cancel the escrow cover given to Videocon and allot the escrow of 1050 mw to other projects recommended by Crisil, which had been commissioned by TNEB to do a study comparing the tariff of IPPs under memorandum of understanding MoU and international competitive bidding ICB route projects.

Sources say the reason for cancellation of escrow for Videocon project was because the Crisil study had found that the tariff quoted by Videocon and agreed to by TNEB was very high viz Rs 4.1 per kwhr. Levellised tariff was estimated at Rs 4.072 per kwhr but this did not include port charges.

The crisil study has come in handy for TNEB to review the whole project and make a decision on escrow issue. Videocon has also not obtained the Central Electricity Authority CEA okay for the capital cost of the project, it is said.