Power commission restrains Lanco
Yoginder Gupta
Tribune News Service

Chandigarh, June 18
The Haryana Electricity Regulatory Commission (HERC) yesterday restrained Lanco Infratech from contracting out to any other entity the 389 MW of power committed by it to Haryana till further orders.

The Haryana government in 2006 had initiated the process for procurement of power up to 2,000 MW from private power. Based on the levelised tariff for 25 years, Lanco Infratech (389 MW), PTC (300 MW) and Adani Power (1,424 MW) were selected and the letters of intent (LOI) to them were issued on July 17, 2008.

The date for signing of the power purchase agreement (PPA) was fixed for August 7, 2008, with the consent of the bidders. While Adani Power and PTC signed the PPA, Lanco, which had offered the levelised rate of Rs 2.355/kWh, did not turn up.

The Haryana Power Generation Corporation Limited (HPGCL) suspected that Lanco had used the LOI issued to it by the state government to get various concessions for the union government. HPGCL MD Sanjeev Kaushal wrote to the union government to ensure that no power producer in future was able to use the LOIs issued by the states for taking concessions from it and then resile from the agreements with them.

Taking up a petition of the HPGCL, the HERC yesterday accepted the request of Lanco to adjourn the hearing for three weeks subject to the stipulation of not creating any third party rights by it on the power it had committed to Haryana.

Ajay Gupta, Additional Advocate General, Haryana, appearing for the HPGCL quoted from an interview given by the chairman of Lanco wherein he had said Lanco intended to withdraw from the commitments given to Madhya Pradesh, Haryana and other states and to revert to the merchant power sale mechanism, which was more profitable to the producers.

After exhausting all options available to it to make Lanco sign the contract, including encashing of the bid bond of Rs 11.67 crore, the HPGCL has now filed a petition before the HERC for direction to Lanco to sign the PPA for sale of power to Haryana and for restraining the company from committing the contracted power to any other party.