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Foreign firms blame delays, exit

Anil Sasi in New Delhi

The inability of state electricity boards to provide adequate payment security cover and delay in getting clearances are the primary reasons for exit of several high-profile foreign players from the power generation sector over the past few years.

As many as eight major foreign promoters or collaborators have exited power projects during recent times because the projects failed to make a headway out of the maze of approvals.

While the US-based Cogentrix Energy Inc has withdrawn from the 1,013-mw Mangalore Thermal power project in Karnataka and the French power major Electricite de France pulled out of the 1,082-mw Bhadrawati Thermal Power Plant in Maharashtra.

Cogentrix indicated no reasons for withdrawal, while Electricite de France cited inordinate delay in getting clearances from various authorities, high coal price sought by the coal supplier and lack of commitment to escrow arrangements as reasons for pulling out of the Bhadrawati project.

In case of the S Kumar-promoted 400 mw Maheshwar hydel project in Madhya Pradesh, the US-based Bayerwerk View pulled out because of non project specific reasons.

Ogden Energy of the US withdrew from the same project because of its own reasons, including internal restructuring and changed business focus.

In case of the 1,070 mw Korba East Thermal project, Daewoo Power Ltd issued termination notice to the Madhya Pradesh government in August 2000 citing inability of the state government to provide payment security.

Ogden Energy Asia Pacific exited from the 420 mw Barakweshwar thermal project in West Bengal.

The project was coming up as a joint venture between the West Bengal Power Development Corporation, DCL and Ogden Energy.

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