Standard Post with Image

Auction of Stressed Power Asset; A Boon or Ban !

105,000 MW power plants are classified under stressed category vis-à-vis lack of fuel supply or PPA. Power ministry scheme to auction the stressed asset may attract bid for the projects with FSA and PPA agreement tied up. Given the auction process to take up, will the bid price sufficient enough to clear the lenders due and Owner’s equity, is a question to be answered. However, state Discom of UP, Gujarat and Maharashtra, will benefit out of the auction process, for getting power at substantially low tariff with almost negligible fixed cost.

Further, fate of the projects without FSA and PPA are at toss. Hence government should take up the preventive measure instead of corrective measure by improving coal supply scenario, executing the PPA for which FSA is already tied up