With the 3960 MW Sasan Ultra Mega Power Project (UMPP) now generating power, JP Chalasani, CEO, Reliance Power, says that this is the largest integrated power project anywhere in the world. During bidding, the levelised tariff for this project was Rs 1.196 per unit.
Talking to CNBC-TV18, he says the tariff at which the company will be selling to seven states (Madhya Pradesh, Punjab, Uttar Pradesh, Delhi, Haryana, Rajasthan and Uttarakhand) is significantly lower at Rs 1.30 per unit. He says it is a large project, and now the company’s top-line and bottom-line would substantially keep increasing.
Here is the edited transcript of the interview with CNBC-TV18
Q: The 3960 MW Sasan Ultra Mega Power Project (UMPP) has now started generating power. Have the tariffs been finalised for this particular power project? What will the blended tariffs be at which you will supply to the seven states?
A: The tariff for this project was finalised through the bidding route as you know. The levelised tariff for this project was Rs 1.196 per unit when the bidding was done. Year-on-year, the tariff should be around Rs 1.30 per unit. It is the tariff at which we will be selling to seven states. So, for these states, it is a significantly lower tariff compared to current procurement and for us, it is a large project coming under the stream. So for Reliance Power the topline and bottomline would substantially keep increasing now.
Q: Have you locked in on the coal arrangements for this particular project?
A: This is the largest integrated power project anywhere in the world. The project has got both the coal mine as well as the power plant together. As you know that the connected coal mine Moher Amlori extension has started production in September 2012. So this project would get coal directly from the captive coal mine. Effectively, this is two projects in one - the largest coal mine in the country and the largest power plant.
Q: What about the contribution to the topline and bottomline? When would it meaningfully start contributing to your books? What kind of a percentage increase can one expect?
A: The first unit is 660 mw, which we had done ahead of schedule. May 2013 is the scheduled date for this, but it is done ahead of schedule. We synchronised on March 9 and we will now stabilise and make it fully operational by end of this month. So it will start giving us stable revenues from April 1, and each 660 mw unit thereafter would come in at an interval of three months so. Therefore it will keep on adding. The idea is once all the six units are commissioned, the topline would go up by over Rs 5,000 crore and the EBITDA would be Rs 2,500 crore.
Q: When will all the six units be commissioned? What kind of a timeline are we looking at?
A: At an interval of three months each.
Q: You guys had approached the Central Electricity Regulatory Commission (CERC) for the tariff revision for the Sasan Project. Can you give us any updates on that?
A: That is in line with the Power Purchase Agreement (PPA) and whatever the change in law provisions are there. We approached the CERC to change the tariff, which is now in front of CERC. It will take its own time to do on this. The significant achievement here is this project is remotely located and largest project along with the coal mine. Nobody has done it till date. That is done it in the shortest possible time, so that is the significant thing.
This is the first major project of Reliance Power of 4,000 mw size, so therefore for the company it is significant achievement and having started with the first units and one by one all the units keep coming on this, so therefore that is being on track makes a significant difference for Reliance Power.
Q: So in the next 18 months this entire project will be completed?
A: In 15 months.