The potential takeover of financially-ailing independent power transmission company South East UP Power Transmission Co Ltd (SEUPPTCL) has attracted expressions of interest from leading names like Adani Group and Torrent Power.
SEUPPTCL is undergoing corporate insolvency resolution process under the Insolvency & Bankruptcy Code, 2016. The private transmission company has filed for insolvency after its Spanish promoter Isolux Corsan filed for bankruptcy in its home country.
It may be recalled that on July 16, 2020, National Company Law Tribunal (NCLT), Allahabad Bench, ordered the commencement of the corporate insolvency resolution process (CIRP) with respect to SEUPPTCL. Accordingly, expressions of interest for taking over SEUPPTCL were first floated on September 23, 2020. Revised EOIs were floated on October 14, 2020. The latest round of EOIs was on February 18, 2021 to which Adani Group and Torrent Power are amongst those responding.
Brief History
In around 2008, the Uttar Pradesh government authorized Uttar Pradesh Power Transmission Company Ltd (UPPTCL) to select a private transmission service provider (TSP) to set up an intrastate transmission scheme for 765kV single-circuit Mainpura-Bara line with 765/400kV substation at Mainpuri along with associated work, through the TBCB route. A project special purpose vehicle “South East UP Power Transmission Company Ltd” was subsequently incorporated on September 11, 2009.
Isolux Corsan Concessions SA (ICSS) of Spain emerged as the successful developer and SEUPPTCL was accordingly taken over by the private developer in around July 2011. SEUPPTCL was supposed to develop the project under BOOT mode, with a concession period of 35 years.
The infrastructure envisaged included 1,600 km of transmission lines and five substations. The major elements were the 765kV single-circuit Mainpuri-Bara lines (two single-circuit lines of 350 km each) and the 765kV Mainpuri AIS substation.
SEUPPTCL signed the transmission service agreement (TSA) with four discoms of Uttar Pradesh, in January 2012. The project was envisaged to be completed by January 2014.
Upon the request of the private concessionaire, the project was divided into two groups and the scheduled commercial operations date was revised to December 2014 for Group-1 and August 2015 for Group-2.
However, the project faced severe delays on account of various factors. Group-1 was completed and declared commercially operational in October 2017. Group-2 is under construction.
Domestic lending
In around February 2014, SEUPPTCL borrowed over Rs.4,000 crore from domestic lenders to complete the project. Major lenders included PFC and REC. However, SEUPPTCL could not repay the loans on time and turned defaulter. As per the latest position, PFC has a debt exposure of Rs.2,815 crore in SEUPPTCL while REC has Rs.1,159 crore. There are also other lenders like Bank of India.
Pre-EOI phase
It is interesting to note that in 2017, Adani Group has agreed to infuse funds required to complete the project. SEUPPTCL and Adani Group had even signed an Investment Agreement, to this effect on January 19, 2017. However, this agreement was rejected arbitrarily by Uttar Pradesh Power Transmission Company Ltd (UPPTCL) as it did not want the project to bring in a private investor. On its part, the government of Uttar Pradesh had then promised that UPPTCL would take over the project at a fair price to be determined by independent valuers. It is further learnt that UPPTCL did not agree with the fair price arrived, and the matter got into further legal complexity. This ultimately led to the commencement of the corporate insolvency resolution process by NCLT, in July 2020, and the floatation of EOIs as discussed in this story.
Asset commissioned in Group-1
As mentioned earlier, the project was divided into two groups. Group-1 is in operation and Group-2 is understood to be 30 per cent complete. The various assets commissioned in Group-1 are:
Transmission Lines:
- 400kV double-circuit Rewa Road-Meja (25 km)
- 400kV double-circuit Bara-Meja (25km)
- LILO of 400kV Panki-Obra at 400kV Rewa Road substation (12 km)
- 765kV single-circuit Mainpuri-Bara (1x350km)
- 400kV double-circuit Mainpuri-Aligarh (120km)
- LILO of both circuits of 400kV double-circuit Orai-Mainpuri (PGCIL) at 765kV Mainpuri substation (30 km)
Substations:
- 765kV Mainpuri AIS
- 2 x 315 MVA 400/220kV GIS at Rewa Road
(Featured photograph for representation only)
