Adani Power can use change of intn'l law argument, says SC

In an interview to CNBC-TV18, Pramod Deo Former Chairman of CERC and Ashok Khurana, Director-General of Association of Power Producers spoke about the final order of the Appellate Tribunal for Electricity (Aptel) versus Adani, Tata Power case.

Below is the transcript of Pramod Deo and Ashok Khurana's interview with Pragya Bharadwaj and Reema Tendulkar on CNBC-TV18.Pragya: What is your first take on whatever you have heard from our correspondent coming in from Delhi? Finally the Supreme Court has allowed the case to be heard on the grounds of change in Indonesian law and force majeure as well.Deo: If you see the CERC order, in the CERC order we had not allowed change in law, we had said that change in law is not applicable here. We had gone for a compensatory tariff on a completely different ground that is of hardship and it will be not possible for anyone to generate electricity and supply it at a loss; that was the argument.So, what had happened is that the Appellate Tribunal had allowed as an interim order to recover this compensatory tariff and that was appealed in Supreme Court. So that is why the Supreme Court has said that Appellate Tribunal can get into all the issues. Supreme Court from what I heard also pronounced on this particular issue that changed in international law is something which Appellate Tribunal can examine because as I said the CERC had very categorically said that change in international law does not get covered under the existing power purchase agreement (PPA). Reema: What have you made of the Supreme Court verdict that they have allowed Adani to raise the issue of change in international law with respect to the compensatory tariffs but they can’t raise the tariffs more than what was prescribed by the CERC. How much of a positive is this and would this in a way set the precedent going ahead?A: It is a very positive judgement of Supreme Court. In fact it adds to the CERC judgement that you have to take into account the change of international law. Even if not Aptel will hear it and put a seal on the CERC order as I understand from the judgement –the only doubt was there whether changed international law can be considered a valid ground for compensatory tariff. Supreme Court has now cleared the deck.I hope that Aptel will hear on day-to-day hearing and clear this long standing thing of Adani and Tata Power. It will also have positive impact on Tata’s and we hope that in next about three or four months the compensatory tariff which was given by CERC will by retrospective effect will be upheld and these projects will start recovering the fixed and variable cost and stop making losses.