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N. Ramakrishnan

CHENNAI, April 2

PPN Power Generating Co Ltd, which runs a 330 MW combined cycle power plant at Pillaiperumalnallur in Tamil Nadu, has defaulted on repaying an instalment of debt, which is due for the quarter ending March 31.

The Tamil Nadu Electricity Board (TNEB), which buys power from the plant, has not paid PPN the money for servicing the debt, which in turn has resulted in the company defaulting on its obligation, according to reliable sources.

The instalment of debt repayment totalling Rs 50 crore — principal and interest — was due on April 1.

TNEB officials could not be reached for comment.

The 330 MW combined cycle gas turbine plant, which runs on both naphtha and gas, is one of the five independent power producers in the State.

As it is, the TNEB has been paying the IPPs a flat tariff of Rs 2.25 per unit for the power it purchases from them (when the actual tariff is much higher) and also settling the debt service obligations, whenever the IPPs present the bill.

PPN Power Generating Co had borrowed rupee loans totaling about Rs 470 crore from a consortium of lenders led by the Industrial Development Bank of India. The 11 lenders in the consortium are seized of the matter and are hoping that the problem will get sorted out at the earliest, according to the sources in the institutions.

Normally, according to them, PPN (as also the other IPPs) raises its bill for servicing the debt — about Rs 50 crore — at least a week before the payment is due to the institutions and the TNEB pays the cheque in a couple of days.

However, this time the cheque payment has not yet come. The TNEB has also not paid the monthly bill for the power it purchases from PPN, according to the sources. The monthly billing is about Rs 80-90 crore.

In February, the TNEB had paid PPN about Rs 45 crore to pay an instalment of foreign currency loan. The company had borrowed about $54 million from the Japan Bank for International Cooperation.

PPN commenced commercial operation in April 2001 with the plant being run only on naphtha. It is now operated on a mix of naphtha and gas. PPN has got gas allocation for 60 per cent of the capacity and will get gas supply from GAIL for the full capacity later this year.

PPN Power Generating Co has been promoted by Apollo Infrastructure Projects Finance Co, which has a 28 per cent equity stake. The other equity partners are Marubeni Corporation of Japan, the equipment supplier, with 26 per cent, El Paso Energy of the US, 26 per cent, and PSEG of the US, 20 per cent.

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