Business Today

Taking Power Plants Out of the Red

Adanis 4,620 MW plants in Mundra, and 1,320 power plant of Essar at Salaya near Jamnagar have stopped generation while Tata's Mundra Ultra Mega Power Project is still in production despite losses.
twitter-logo PB Jayakumar   New Delhi     Print Edition: July 29, 2018
Taking Power Plants Out of the Red

To bail out power plants running on imported coal (Tata Power, Adani Power and Essar Power), the Gujarat government has appointed a highpowered committee.

Adanis 4,620 MW plants in Mundra, and 1,320 power plant of Essar at Salaya near Jamnagar have stopped generation while Tata's Mundra Ultra Mega Power Project is still in production despite losses. The plants ran into trouble after Indonesia changed its coal policy in 2012, and closer home the Supreme Court disallowed compensatory tariff against the increased cost of imported coal.

Tata Power and Adani Power had in the past offered to sell their plants to the Gujarat government, but the state government did not take them up then. Perhaps it is time for the Centre and the state government to examine this option. Instead of burdening the nation with losses and knee-jerk reactions, perhaps a better way could be found to salvage the thousands of crores lent to construct these plants.

P.B. Jayakumar

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