power project fined Rs 40 crore

The AP Transco and Discoms have fined the Konaseema power project Rs 40 crore for its failure to start production at its 445 MW Combined Cycle power station on time. Production at the Combined Cycle project was to begin by October 2009.

The company has now been asked to return the Rs 40 crore it had already received from the four Distribution Companies as fixed charges of the project.

The Konaseema project has been generating power at its 280 MW gas-based station at reduced capacity due to shortage of supply from the Gail and ONGC. This prompted the company to transform the present unit to a combined cycle unit, where gas and naphtha can be used to generate power.

As per the schedule submitted to the government, it had to complete the transformation by October2, 2009, but the company could not due to technical problems. “The company has to pay penalty for the period starting from October 2. If it does not commission the transformed unit by February end, we may can even cancel the power purchase agreement between Transco and the company,” said a senior official in the Transco.