CGPL stops power supply to Rajasthan discoms

The Coastal Gujarat Power Limited (CGPL) has decided to discontinue the supply of power to three Rajasthan government-owned distribution companies from its Mundra-based 4000 MW Ultra Mega Power Project (UMPP) due to non-compliance with payment security related agreement.

CGPL, a wholly owned subsidiary of Tata Power Company Limited, has invoked its rights under the Power Purchase Agreement (PPA) and the decision follows several notices served to the Discoms, thus, effectively terminating its contract, stated an official release from the company on Thursday.

"Rajasthan discoms have been in default of paying its dues in a timely manner leading to large outstanding dues. The balance of payments on account of fuel tariffs is already a challenge, as recovery through tariff is lower than spendings. With continued non-payment in a timely manner and non-availability of payment security, the company finds it difficult to manage payment for its obligations to buy fuel and discharge its various obligations," the statement added.

The company, however, did not divulge the quantum of the outstanding dues.

The three discoms account for 10% of the total capacity from Mundra UMPP, which currently operates three of the five units having a capacity of 800 MW each. "The company will make alternate arrangements for contracting and selling this power," it said.

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