Maheshwar Hydro (400 MW) is one of the largest hydropower projects in the list. Industry executives said the other hydropower projects were relatively smaller but the total number would be significant. Around six hydro projects are likely to land in the NCLT.
Anil Gupta, vice-president and head of financial sector rating, ICRA, said there were a handful of business groups, corporates and private equity players who had an appetite for acquiring power sector assets. “They would be selective in choosing assets in the NCLT. It is going to be a buyers’ market,” he said.
More than two dozen projects are incomplete and will find it hard to attract buyers. Among stressed assets that were undergoing SDR but were incomplete are Rattan India Amravati, Athena Chhattisgarh, GMR Vemagiri, three projects of Lanco Infra, Vandana Vidyut and JAL Power. The latest status report by the Central Electricity Authority (CEA) has listed these projects under the ‘uncertain completion/work held up’ category.
Private power sector executives are banking on the High Powered Committee (HPC), constituted under the chairmanship of the Cabinet Secretary P K Sinha to design a framework for resolving the prevalent issues in the sector.
“As observed earlier, the major reasons for stress in most of the thermal power projects have been non-availability of fuel, cancellation of coal blocks, projects set up without linkage, lack of enough PPA, inability of the promoter to infuse the equity and working capital, contractual/tariff related disputes, issues related to banks/financial institutions, delay in project implementation leading to cost overruns and aggressive bidding by developers in PPA,” the Allahabad High Court noted in its order on Monday.
Government officials said the committee would come up with a forward-looking plan suggesting a framework for under-resolution, resolved and impeding stressed assets. It has been directed by the HC to submit report by September 29.
A senior industry executive said the government owed the thermal power generation sector Rs 200 billion in the form of regulatory assets, non-payables, etc. “We are hoping the HPC will take immediate action… Regulatory niggles have hampered the sector. These need to be addressed,” he said. If not devised now, another 10-15 GW would be facing stress soon, said the executive.
The Independent Private Power Producers’ Association of India (IPPAI), which was the lead petitioner in the case, said they were evaluating the judgment and discussing with members if they should challenge it in a higher court.