AP govt directs gas supply to GMR’s Vemagiri plant

AP govt directs gas supply to GMR’s Vemagiri plant

New Delhi: Languishing for a year for want of fuel, GMR group’s largest power plant at Vemagiri will be back on stream from January 2008, with the Andhra Pradesh government ordering diversion of gas to it from some operational power plants in the state.

The 388.5 MW Vemagiri Power Generation Ltd would receive 1.12-1.15 million standard cubic metres of natural gas per day from Gail India. This would be sufficient for meeting up to 70% requirement of the plant in Andhra Pradesh.

The gas supply to Rs1,500 crore power project is, however, for a period of four months only according to a communication sent by state authorities to GMR Energy.

Commissioned in September 2006, the project was unable to generate even a single unit of electricity due to unavailibility of gas, causing the promoters substantial revenue loss.

When contacted, GMR Energy CEO Raaj Kumar confirmed the report. “The Andhra Pradesh government has conveyed willingness to supply gas to our Vemagiri project from January 2008. The plant was has not been operational for about a year because of non-availability of the fuel, due to which we incurred financial losses of more than Rs150 crore," he said.

Sources said the state government has directed four projects in the area, including those owned by Lanco Infratech and GVK Power, to generate power using naphtha. The resulting excess gas would be diverted to the Vemagiri project.