State-owned Haryana Power Generating Company Ltd (HPGCL) fined Reliance Infrastructure Rs 204.46 crore on March 4, 2010, for delaying the commission of two units of 600 MW each at Yamunanagar Thermal Power Station. Reliance Infrastructure, surprisingly, was awarded a gold shield by the Union power ministry for early commissioning of these two units on January 29, 2010.

According to HPGCL, “the thermal station is still incomplete as on March 30, 2010” and it has not “finally taken over”. Reliance Infrastructure, however, insists that the final testing, commission and takeover of the two units by HPGCL occurred in April 2008 and June 2008, respectively.

Reliance Infrastructure refuted HPGCL’s allegation of delays and cited problems in land acquisition and local disputes and riots as the reason for the delay. As for the fine, the company said HPGCL has actually withheld Rs 160 crore for the damage caused by those delays. “While Reliance Infrastructure has already submitted a detailed case for grant of time extension on account of various reasons for delay beyond the control, not attributable to Reliance Infrastructure , HPGCL has withheld an amount of Rs. 158.18 crore from the payment due to the company,” Reliance Infrastructure said in a statement in response to queries by The Indian Express.

Although the first unit was declared operational on April 14, 2008, the performance guarantee test occurred on July 12, 2008, according to HPGCL’s reply to a right-to-information request filed by All India Power Engineers Federation. Similarly, Unit II was declared operational on June 26, 2008, while the actual performance guarantee didn’t occur until August 12, 2008.

In a May 18, 2009 document, the Haryana Electricity Regulatory Commission denounced the claimed dates of the performance guarantee. “There is abnormal delay in completion of PG tests due to which the units have not been taken over by HPGCL,” the regulator said in a tariff order dated May 18, 2009. As recently as March 30, 2010, HPGCL documents stated that “some demonstration tests are pending in respect to units I and II which are to be completed by Reliance Infrastructure before finalisation of FTO (final takeover).”

The power ministry did not respond to queries. The project is also suffering operational shortcomings, including a total plant load factor of around of 68.66 per cent for unit one and 69.53 per cent for unit two, causing a generation loss of 499 million units (MU) and revenue loss of Rs 61.40 crore. According to averages deduced using the Central Electricity Authoritiy’s monthly executive summary, the plant’s average PLF had been targeted at 78.78 per cent by the end of FY 08-09. The CAG report for 2008-09 placed in the Haryana Vidhan Sabha pointed to the company’s shortcomings in delaying the project and the subsequent financial losses as a result of the tardiness.

Source: http://www.indianexpress.com/news/HPGCL-fines-Rel-Infra-for-delaying-power-project/602660