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Mundra UMPP discontinues power supply to Rajasthan

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Mundra ultra mega power project (UMPP) has stopped supplying power to three state-owned distribution companies in Rajasthan for non-payment of dues on time. The 4,000-MW coal based thermal power plant is being executed through Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary of Tata Power, has a power purchase agreement (PPA) with five states—Gujarat, Rajasthan, Maharashtra, Haryana and Punjab. The three Rajasthan Discoms account for 10 per cent of the total capacity from Mundra UMPP.

The company said it had sent several notices to the Discoms before terminating its contract. “Due to consistent failure on the part of Rajasthan Discoms as procurers to fulfill the obligations including collateral arrangements in spite of repeated and regular reminders, CGPL was constrained to issue notice to the Rajasthan state Discoms,” the company said in a release, adding that Rajasthan Discoms have been in default of paying its dues in a timely manner leading to large outstanding dues.

“With continued non-payment in a timely manner and non-availability of payment security, the company finds it difficult to manage payment for its obligations to buy fuel and discharge its various obligations,” CGPL added.

The company will make alternate arrangements for contracting and selling this power.

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