Mumbai, India (PressExposure) July 06, 2011 -- ADAG-promoted Reliance Power has entered into a port services agreement with the Krishnapatnam Port Company (KPCL), part of the Hyderabad-based Navyug group, for handling coal imports for the 4,000 mw Krishnapatnam Power project.
Indications are that Anil Ambani-led ADAG's Rs 17,500 crore UMPP would require at least 15 million tonne of imported coal per year. KPCL CEO Anil Yendluri said, "They now have to get back to us, on the finer terms of the deal." Funds for the power project have already been tied up through a special purpose vehicle, Coastal Andhra Power. Coal for the UMPP would be shipped from the RPower acquired mines in Indonesia till the port site and evacuated by conveyor belts to the power plant.
Reliance Power project is slated for completion by 2013. Therefore the agreements for coal handling would have to be finalised well ahead of the completion. Yendluri said, "We still need to work out the finer details of the agreement."
The terms included a long-term port services agreement that KPCL already has with JSW Energy and Meenakshi power. Similar agreements were also there with projects coming up in Karnataka and Andhra Pradesh, he added. The agreements were for a minimum period of ten years.
KPCL, Yendluri said, had capacity to handle up to 200 million tonnes per annum.
KPCL and RPower will have to work tariff for the coal handling services. These tariffs, he said, wherever normally done will have both fixed and components. He however, declined to go into the specifics of the tariffs. But coal-handling tariffs currently range from Rs 120 per tonne at Paradip to Rs 253 per mt at Mormoguo as prescribed by the Tariff Authority for Major Ports. However, KPCL does not come within the purview of the Major Ports Statute and was consequently free to levy own tariff, Yendluri said.
Asked whether ADAG would be picking up an equity stake in the port project as part of the agreement, Yendluri said, "It is for them to decide."
An e-mail query sent to Reliance Power spokesperson NagajRao did not elicit an immediate response. RPower CEO JP Chalasani could not be contacted on phone.
Private equity fund 3i has already picked up a stake in the project. The London Stock Exchange listed private equity fund has picked up a stake of 10 per cent in the first phase of the power project. The first phase of the port project costs Rs 1,400 crore, that comprised of Rs 420 crore equity. The remaining comprised of debt from both domestic and international sources.