Essar Power may owe Rs1,200 crore to Gujarat Electricity Board
18 March 2005
Ahmedabad: An internal committee of the Gujarat government has assessed that Essar Power may owe the Gujarat Electricity Board (GEB) Rs1,200 crore. In the committee's view, the sum is owed to the GEB towards electricity charges and interest due thereon for delayed payment.
The state electricity board had earlier represented to the state government that Essar Power had diverted power meant for it to Essar Steel, thereby depriving the board of its entitlement to power generated by Essar Power under the power purchase agreement (PPA) between the two.
Essar Power claims that under the terms of the PPA, the GEB has to file a claim for any outstanding amount rather than take the matter to the state government. In case the dispute is not resolved, the PPA provides for arbitration to settle the issue. The company, in the meanwhile, has said that it will contest the claim, as it had already settled the matter by paying Rs64 crore last year.
As per the PPA between the two companies, 300mw is to be supplied to the GEB and the rest to Essar Steel. On a weekly basis, the GEB is required to inform Essar Power about the amount of power it would lift.