“In all, it is a very fair sharing of responsibility and sharing of benefits,” said Praveer Sinha, MD and CEO of Tata Power.
In a relief to Adani Group and Tata Power, the Supreme Court (SC) on October 28 allowed state distribution companies (Discoms) and power producers to move Central Electricity Regulatory Commission (CERC) to amend the power purchase agreement (PPA) as per the recommendations of the high-powered committee.
Sharing his views, Praveer Sinha, Managing Director and Chief Executive Officer (CEO) of Tata Power told CNBC-TV18, “There is a fair and equitable sharing of pain by all the stakeholders. So the utilities or the buyers of power will be allowing the pass-through of coal. The lenders will be taking a 20 paisa cut and the sharing of profit will happen by the project developers of the coal mines. In addition to this, there are two very big upsides which have been given. One is that the developers have to supply 90 percent of the power and not 80 percent which is a present cap and that means additional quantity of power will come to the utilities and DISCOMs which will be at a very notional cost virtually at the variable cost. Second is that the option of extending the PPAs from 25-35 years again since the project would be fully paid for and fully depreciated, they will get a longer period of supply of power at a very notional cost."
“In all, it is a very fair sharing of responsibility and sharing of benefits,” said Sinha.
Speaking about whether the company will get the benefit of the SC order, he mentioned, “As per the HPC report, it has said, effective October 15th. So it is a question of accounting that will have to be done but I think it is little premature, let it go through the whole process of going through the state governments and also the CERC and then only, we will be able to see.”