SBI moves SC for amendment in power firm-discom pacts
New Delhi: SBI has moved the Supreme Court seeking implementation of a high power panel's recommendation to amend the PPAs between various discoms and three Gujarat-based electricity producers who were running losses as they could not hike tariffs to compensate for the rise in cost of coal imported from Indonesia.
SBI is part of a consortium of banks that funded the three power producers -- Tata Mundra, Adani and Essar -- who were not allowed by the apex court to charge compensatory tariff in lieu of the increase in cost of coal they were importing from Indonesia.
The top court by its order of April 11, 2017 had set aside the decisions of the Central Electricity Regulatory Commission (CERC) and Appellate Tribunal for Electricity allowing the power producers to charge compensatory tariff.
Thereafter, all stakeholders including the firms had a meeting with Union Finance Minister Arun Jaitley. Subsequently, the central government recommended formation of the high powered committee, State Bank of India said in its application filed through advocate Sanjay Kapur.
Earlier this month, according to the plea, the panel recommended that the power purchase agreements (PPAs) which the three companies had with discoms in several states be amended based on the cost of coal imported from Indonesia.
It also said that after the committee gave its recommendation, applications were moved by the Gujarat Urja Vikas Nigam Ltd (GUVNL) and the state government in the apex court for permission to amend the PPAs
SBI, seeking to be impleaded in the matter and supporting the pleas of GUVNL and the state government, has contended that entire net-worth of the three companies has almost eroded and the monies loaned to them by the banks was "at serious and imminent risk".
"So far as Essar Power Gujarat Ltd is concerned, it is already a non performing asset (NPA)," it has said, adding that the remaining two companies have sent letters saying they would be constrained to stop operation as they cannot run their plants at a loss.
According to SBI's plea, the consortium of banks have till March 31, 2017 lent Rs 19,127 crore to Adani Power, Rs 4,214 crore to Essar Power and Rs 10,159 crore to Tata Mundra to run their plants.