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Adani Power forgoes Rs 12,000 Cr for Gujarat consumers

By IndianMandarins- 11 Jan 2022


New Delhi (11.01.2022): The Adani Group has chosen to waive the Rs. 12,000 crore compensation that was allowed by order of the Supreme Court in 2019.

In 2007, Gujarat Urja Vikas Nigam Limited (GUVNL) had signed two power purchase agreements with Adani Power Limited’s (APL) imported coal-fired power stations at Mundra. After coal prices shot up when the Indonesian government decided to base its export coal pricing on international prices, APL sought fair equivalence through alternative coal supplies from the Gujarat Mineral Development Corporation (GMDC) and, when that failed, through compensatory tariffs from GUVNL. After the state utility declined the request, APL had terminated the agreement in 2019, therefore, leading both sides to court.

In October 2021, during the severe coal shortage that almost crippled the national power sector, Adani Power Ltd had agreed to restart its Mundra plant operations keeping in mind the interests of consumers in the state of Gujarat. At the behest of the Government of India and the Government of Gujarat, APL arranged to provide 1,200 MW of power to the state.

This willingness to come to the state's aid in a time of crisis likely thawed the ice between GUVNL and APL and paved the way for a mutual settlement of all disputes and issues.

While APL had won its case in the Supreme Court and could have enforced the judgment, the two sides agreed to move ahead with the settlement to bring financial relief to the vast number of consumers in Gujarat.

Also, last week, GUVNL filed to withdraw its curative petition before the Supreme Court stating that it had arrived at a settlement with APL. Both parties are expected to file similar joint applications in other pending cases before the respective authorities.

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