Mumbai : Tata Power has offered to sell 51 per cent stake in its 4,000 MW Mundra power project for Re 1 to states like Gujarat which buy electricity from it so as to rescue the debt-laden, loss-making business.

Coastal Gujarat Power Ltd (CGPL), the Tata Power unit which operates the Mundra project, wrote to Gujarat Urja Vikas Nigam Ltd earlier this month offering to retain only 49 per cent stake and operate the project as a contractor provided the procurers buy all the power at higher tariffs.

  In the letter, copies of which were marked to Nripendra Misra, Principal Secretary to Prime Minister, and Union Power Secretary, CGPL CEO Krishna Kumar Sharma said Mundra has accumulated losses of Rs 6,457 crore against a paid up equity of Rs 6,083 crore. Besides, CGPL has outstanding loan of Rs 10,159 crore and lenders have stopped further disbursal due to non-viability of the project, he wrote.  Tatas had in February 2006 won the bid for 4,000 MW Mundra project in Gujarat, quoting a price of Rs 2.26 for every unit of electricity generated. It had intended to fire the plant with coal imported from mines owned by the Tata Group in Indonesia.

In 2010, the Indonesian government said that any export of coal could be done only at prices linked to international rates. Tatas, in turn, sought higher tariffs for power, but the plea was rejected by the Supreme Court. When contacted, Tata Power said it made the suggestion after exhausting all other option. Bankers, it said, “made a suggestion that if 51 per cent equity is taken over on a back to back basis with the procurers, then the procurers would have advantage of competitive power for full life of the plant e.g. 40 years” at “very low and competitive price”.

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