In November 2023, NLC India, announced that the first unit of the Ghatampur Thermal Power plant was “successfully synchronized” (connected) with the grid. One full year later, the plant is yet to start commercial operations.
The 660-MW plant is the first of the three similar plants of NUPPL, a 51:49 joint venture of the central public sector NLC India and State-owned Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd.
NLC India had told businessline earlier that the commercial date of operations (the date from which the power purchase agreement takes effect) would happen in July and November 2024 for the first two units and March 2025 for the third unit, respectively. (The project was awarded to NUPPL in August 2016; the three units were scheduled to be generation-ready in May and November 2020 and May 2021, respectively.)
Yet the COD for even the first unit has not been announced. NLC India has not responded to requests for comments, but businessline learns from market sources that it has commercial disputes with L&T-MHI, the boiler supplier, as well as BGR Energy, the supplier of ‘balance of plant’.
In August, the rating agency ICRA gave NUPPL a ‘stable’ (BBB+) rating, but took note of “the implementation risks associated with the under-construction status, with the project witnessing delays in execution and cost escalation.” This, it noted, was “owing to issues with the balance of plant contractor (BGR Energy)”. Incidentally, BGR Energy insists that it is not at fault.
cost overruns
Due to the delay, the project cost increased a second time — from ₹17,237 crore originally to ₹19,406 crore and further to ₹21,781 crore, ICRA noted. Correspondingly, the debt also rose from ₹12,067 crore to ₹16,067 crore.
“The company’s ability to complete the project without further delays and fund the cost escalations in a timely manner would be the key monitorable,” ICRA said, observing further than the company had to tie up funding for the captive mine, which called for a capital investment of ₹2,243 crore.
Seventy-five per cent of the electricity generated by the 1,980 MW plant is to be sold to Uttar Pradesh Power Corporation at a levelized tariff of ₹4.52 a kWhr; the rest of the power is to be sold to Assam. Roughly, this would give NLC India an additional pre-tax profit of about ₹400 crore.