Tata Power's offer to sell Mundra UMPP stake to discoms viable solution: Experts

Tata Power has written to the government and stakeholders offering to sell a 51 percent stake in its Mundra Ultra Mega Power Project (UMPP) to 5 state discoms.

However, CNBC-TV18  sources say it may be open to selling the stake for as low as one rupee given that the crushing debt burden and mounting losses have made the project financially unviable.

Do discuss if this solution is viable and likely to happen soon, the channel spoke to Pramod Deo, Former Chairperson of CERC and Ashok Khurana, Director General of Association of Power Producers.

According to Deo, since nobody can run a power plant incurring losses every month, the above solution could be viable one.

If the discoms buy the stake then it will be a virtual generating company of these five states, says Deo.

Khurana also clarified that Adani Mundra has also made the same offer like Tata Power because they are also in the same boat – all are based on imported coal. The solution suggested by all is a win-win for both.

Deo says if this deal goes through then the discoms will get power at a lower rate and the only risk to that is if prices of imported coal go up very high.

For the consumer it would be an absolute win-win situation, says Khurana.

For the entire discussion, watch video