RPower’s Krishnapatnam UMPP hits road block; may seek govt help

A recent change in Indonesian law mandates all parties to sell coal at market prices. Earlier, Indonesian coal mines had the freedom to bilaterally agree coal prices with buyers. The change in law will impact the viability of all power projects that are based on imported coal, especially from Indonesia

Hyderabad: Anil Ambani Group firm Reliance Power’s (RPower) 4,000MW Krishnapatnam ultra-mega power project (UMPP) is facing road blocks due to various reasons, including a recent change in Indonesian law which mandates all parties to sell coal at market prices, reports PTI.

Earlier, Indonesian coal mines had the freedom to bilaterally agree coal prices with buyers. The recent change in law will impact the viability of this project as well as others that are based on imported coal, especially from Indonesia.

“This change by the Indonesian government will adversely impact not only Krishnapatnam, but all existing and future imported coal-based power plants in India, including UMPPs,” Ashok Khurana, the director general of the Association of Power Producers, said.

The association is likely to approach the government to find a solution in the interest of capacity addition in the country, he said.

Other issues impacting the Krishnapatnam project include the condition of the soil where the foundation for the boiler has to be laid and land disputes at strategic locations.

A team of officials of the Central Electricity Authority (CEA) recently visited the project site at Krishnapatnam in Nellore District of Andhra Pradesh. According to sources, the company has slowed down the construction of the project due to these factors.

“Even after going 75 metres down, engineers found marine sand, which may not be a good sign for laying foundation. If it has to be filled with layers, the cost would go up significantly,” sources said.

When contacted, RPower officials said the company has briefed their stand to the visiting CEA officials.

According to the CEA’s latest report on the project, as of 31st May, work on the boiler foundation is yet to start, sources said.

“90% boundary work completed. Soil investigations for sea water intake systems are in progress. Work on boiler foundation has not yet started,” the report said.

The Krishnapatnam UMPP was originally a 5x800MW project, which was later configured to 6x660MW.

It is expected that the project will start generating power from the year 2013 and will be completed before the contemplated schedule. The project achieved financial closure in July, 2009. The lenders for the project are a consortium of almost 12 banks lead by IDBI and the lending was done on a project finance basis for an estimated project cost of around Rs17,450 crore ($4 billion) with a debt-equity ratio of 75:25.

The company had evaluated various options for sourcing imported coal and has acquired three coal mines in Indonesia.

The coal requirement of around 15 million tonnes for the project would be sourced from these mines, RPower had said earlier.

However, all existing coal supply agreements with the Indonesian coal mining companies (including with affiliates) will have to be modified to comply with the new coal pricing regulations before September 2011, and this has impacted all imported coal projects in India, including the Krishnapatnam project.

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11 million subscribers opt for MNP in last 8 months

In the second week of June, the number of MNP requests is said to have crossed 11 million from 8.5 million in April. The maximum requests have come from subscribers of CDMA players RCom and TTSL

New Delhi: As many as 11 million mobile subscribers have opted for changing their operators in the last eight months or so, with CDMA operators witnessing the maximum users shifting to the GSM platform, reports PTI.

In the second week of June, the number of mobile number portability (MNP) requests is said to have crossed 11 million from 8.5 million in April. The maximum requests have come from consumers of CDMA players Reliance Communications (RCom) and Tata Teleservices (TTSL).

Taking advantage of the MNP facility that allows a customer to change his telecom operator without changing his mobile number, more than 6 lakh customers of Reliance CDMA and 4.5 lakh of Reliance GSM have requested to exit from its network.

Reacting to the MNP churn, RCom presented MNP data for its network till the end of May and said the company is focusing on post-paid category customers, where it is gaining.

“As per the trends so far, RCom is a net gainer in the post-paid segment. Of the total movement, port ins and port outs on post-paid for RCOM, around 80% are port-ins,” said RCom president, corporate and wireless-customer service, Anurag Prashar.

He elaborated that in value terms, this number is around 73% of customers opting for RCom network out of the total movement of users taking place on its network through MNP.

“(Out of) over 25% of customers porting out, half are contributing nothing to the company’s revenues, while the other 50% are of category where Average Revenue per User (ARPU) is less than Rs 50,” Mr Prashar added.

In the case of TTSL, close to 4.5 lakh customers on its CDMA network have requested to switch, while its GSM network gained more than 1.5 lakh users through MNP.

The latest data shows that GSM telecom service provider Vodafone is the biggest beneficiary of the MNP facility, gaining over 1 million customers through the MNP facility.

GSM players Idea Cellular and Bharti Airtel followed Vodafone in getting unsatisfied customers of other telecom players on their network.

Close to 8.7 lakh customers have requested to shift to Idea and approximately 6.3 lakh customers have expressed willingness to shift to Bharti Airtel’s network.

Around 73,000 unsatisfied customers have requested to shift to Aircel’s network.

However, all is not well for the new GSM players, as they are facing the pressure of subscribers wishing to move to established players.

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Athens does not get its lifeline

European financial ministers have failed to agree on releasing funds to prevent a Greek default.

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