M A I N   N E W S

Cogentrix pulls out

BANGALORE, Jan 22 (UNI, PTI) — The United States multi-national Cogentrix, the main promoter of the 1000 MW Mangalore power project, has finally walked out of the controversial project, while its joint venture partner, CLP Power International has evinced interest in continuing with it by accepting all the terms set by the Union Government.

CLP Power International officials, led by its Director for Business Development Tom Watters, conveyed the decision to Karnataka Chief Minister S.M.Krishna at a breakfast meeting here today.

Emerging out of the meeting, Mr Krishna told newsmen that Cogentrix had walked out and the CLP Power International was prepared to carry on with the project. However, a final decision would be taken by the Government only after receiving the report of an expert committee, headed by HDFC group Chairman Deepak Pariekh.

The joint venture company, Mangalore Power Company, which had developed the project at a cost of $ 27 million, ceased operations on December 9 stating that both Congentrix and its partner China Light and Power did not find the project to be economically viable in view of prolonged delays in securing government approvals and litigations.

Mangalore Power Company Managing Director Ron Somers (of Congentrix) was unavailable for comments. Mr Somers had in a statement to the press on December 15, set conditions for the revival of the project. It included submission of the draft counter guarantee by the Centre for the promoters to study the viability, time bound commitment from the Centre and the State Government on resolving outstanding issues, including escrow account, and no major changes in the power purchase agreement signed in 1997.

Mr Watters declined to comment on the commercial terms relating to the buyout of the 50 per cent shares of the Cogentrix. He said as of today, CLP Power International held 100 per cent equity and was looking for an Indian partner.

Though he claimed that the energy tariff of about Rs 2.54 paise per unit mentioned in the PPA was the cheapest among other fast track power projects, he did not rule out the possibility of a fresh look into it.

Cogentrix and CLP had floated the MPC in 1995 as a subsidiary to execute the mega thermal power project near nandikur in Dakshina Kannada District.

Mr Watters, who was accompanied by MPC project development Director Siddartha Mathur said the company was in the process of spotting an Indian partner, which it hoped to decide in about a fortnight.

Mr Krishna said he explained to CLP and MPC representatives that because of the shift in the stance of the Centre there had been a change in the format in which this project was to be executed and also in the PPA.

He said it was also informed that the Centre was unable to grant the counter guarantee given to Enron and Escrow cover had become necessary now.