Tata sets deadline for power sale to R-Infra

Tata sets deadline for power sale to R-Infra

Mumbai: Tata Power Co. Ltd on Thursday offered rival Reliance Infrastructure Ltd, or R-Infra, 200MW in Mumbai until 30 June at Rs5.90 per unit, S. Ramakrishnan, executive director of Tata Power, said.

R-Infra has to inform on Friday if it’s accepting the offer, Ramakrishnan said at a press briefing in Mumbai.

“After that we will review the situation. But we believe that this (Rs)5.90 per unit we are offering is lower than the (Rs)6.30 per unit they are getting from the market," he said.

Tata Power had rejected a Maharashtra government panel’s recommendation last Friday to sell 360MW of power to R-Infra at a regulated rate of Rs4.30 per unit until June, and 200MW through March.

“It was a request to adherence and not a direction by the government and we have told the government it is not possible to fulfil the request," Ramakrishnan said.

Tata Power will on Sunday start diverting power to public sector distribution company Brihanmumbai Electric Supply and Transport Undertaking (BEST) and its own distribution firm, he added.

R-Infra repeated its statement of Wednesday that Tata Power’s offer of Rs5.90 per MW shows it wants to profit at the expense of Mumbai’s consumers.

Tata says it cannot continue with the present arrangement, by which it sells 460MW to R-Infra without a power purchase agreement (PPA).

R-Infra currently buys 400MW from the market to meet the demand of 1,350MW.

“We have an agreement with BEST and our distribution company, and we cannot take that power from those companies who signed an agreement and give it to Reliance, who have not signed one," Ramakrishnan said.

Tata Power, however, ruled out signing a long-term agreement at regulated rates. “We are not signing a PPA with them. After all these litigation and harassment, we will not sign," he said.

Tata Power has agreements to supply 100MW to BEST and 160MW to its own distribution arm till 2017.

The company had supplied 500MW to R-Infra until May 2009 without a formal agreement. But following a Supreme Court order that month, Tata Power said it would cut supply to R-Infra beginning 1 April 2010, because it cannot be forced to sell at regulated rates.

The apex court also cleared Tata to supply power to retail consumers in Mumbai. Since October, R-Infra has lost 30,000 customers to Tata Power’s cheaper rates.