Southern States - Andhra Pradesh-Hyderabad   

YSR demands cancellation of Ramagundam project

By Our Special Correspondent

HYDERABAD Dec. 11. The Leader of the Opposition, Y.S. Rajasekhara Reddy, in a letter to the Chief Minister, N.Chandrababu Naidu, here on Wednesday sought cancellation of the Ramagundam Project (500 MW) awarded to BPL as it was imposing an additional burden of Rs. 375 crores on AP Transco every year. Instead the Government should go in for converting the existing coal-based power project at Vijayawada into 3,000 MW combined cycle gas-based power project, he suggested.

The BPL burden was the direct result of the terms and conditions so generously awarded to the company, he said. Dr. Rajasekhara Reddy said the promoters were allowed an escalation for foreign exchange fluctuations at the rate of 4 per cent per annum and for Indian currency, 11 per cent, with a provision for penalty for default in the schedule.

Although BPL defaulted on all its promises and undertakings, the Government continued to allow it to deviate further from

the original agreement. The BPL was now claiming the cost of the project to be more than Rs. 5.5 crores per MW with more than 40 per cent foreign exchange component.

In contrast, the NTPC was implementing its new coal-based project at Rs. 4 crores per MW and the Muddanur RTRP Project was able to implement its expansion project of 500 MW at slightly over Rs. 3.5 crores per MW. By the time the BPL Project would be completed the capital cost would go up to Rs. 6 crores per MW, hence there was no point in continuing to honour the agreement as every clause had already been flouted.

Instead, the Government might as well consider converting the existing VTPS and Simhadri Projects as combined cycle gas-based power projects by opting for backward integration of 2000 MW gas turbines to each of the above locations as it would only cost Rs. 1.5 crores per MW. The additional requirement of gas per day for those two would not be more than 15 million cubic metres which was a small portion of the gas that would shortly be available in the Krishna basin, he said. Thus by giving up the BPL project, the State could have a 2000 MW backward integration project at the same cost with waste heat recovery system at AP Genco's VTPS.

The latter would completely eliminate the need for using coal for the existing 1,200 MW project as it could use the waste heat recovered from gas turbines. A major benefit would be generation of 1,500 crore units additionally per annum and as it would also mean no fixed capacity charges, it would lead to a saving of Rs. 1,091 crores per annum even if valued at 97 paise per unit, he pointed out.

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