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| Edited By: Sreejiraj Eluvangal |Source: DNA |Updated: Mar 30, 2018, 02:54 AM IST
Reliance Power, which was supposed to get the gas promised in the demerger scheme for setting up gas power projects, remains optimistic on the road ahead despite the unfavourable verdict from the apex court, Jayarama Chalasani, CEO of the company, told DNA. Excerpts:
Do you consider the verdict a huge setback to RNRL?
Not really. The court has upheld our contention on three major issues — on the (company) court’s powers to modify the scheme, on the importance of the MoU and on the need to protect the interests of the shareholders of both companies.
The court has said that suitable arrangement (for gas supply) must not be merely suitable for RIL... (but) deeply affects the interests of the shareholders of both the companies. These interests must be balanced.
What is the status of your various projects? Has the verdict affected your plans?
We aim to be India’s largest private power producer. Reliance Power has over 35,000 mw of power generation capacity at different stages of implementation.
Over 25,000 mw of these projects are based on coal and hydro projects and about 8,000 mw are in gas. The verdict has not affected our plans.
Are you freezing your plans on gas-based power plants, including Dadri, after the verdict?
Reliance Power has plans to set up large capacity of gas-based power plants at various locations including Dadri... The development work of all our gas-based projects have been completed and we will start constructions of these projects once the gas supply arrangements have been negotiated within the time stipulated by the Supreme Court.
A base price of $4.2 per mmBtu will result in a delivered price of around $7.5 per mmBtu in Delhi? Do you believe large greenfield gas projects would be viable at this price?
Gas prices are now to be determined by government as per the Supreme Court judgment. Government has currently fixed $4.2 per unit for 5 years for existing stranded assets. Power plants have a life of 15-20 years and hence this short-term (5 year) price is not fully relevant. By the time our plants are set up, this five-year period will be almost complete.
Gas price for power and fertiliser sectors that are going to be long-term large customers of domestic natural gas will be determined keeping in mind national and public interests. Petroleum secretary has also stated that price is dynamic issue. Pooling concept for gas prices has also been proposed. We believe that various policy issues need to be navigated through before clarity emerges on all these points.
