Gautami Combined Cycle Power Plant

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In January 2004, GPPL began construction of a 464 MW combined cycle power plant based on natural gas in Peddapuram, in the East Godavari District of Andhra Pradesh. The government of Andhra Pradesh (GoAP) awarded the power plant to GPPL on a build-own-operate (BOO) basis in order to alleviate the power shortage in the state. GPPL entered into a 15 year power purchase agreement with Transmission Corporation of Andhra Pradesh (APTRANSCO) to supply power to distribution companies in Andhra Pradesh. This PPA was approved and cleared by Andhra Pradesh Energy Regulatory Commission in June 2003. APTRANSCO was created after GoAP initiated a comprehensive power sector reform in 1998 and functionally unbundled APSEB into one generation company, one transmission company (APTRANSCO) and four distribution companies. During the transition period and as of April 2005, APTRANSCO was operating under a single buyer model and procured power from generation companies for further sale to distribution companies. In July 1996, GoAP conducted an international tender and awarded eight projects to six developers and the bidding criteria was lowest tariff. Gautami power project was the result of the merger of two of these projects to be developed by Satyam Constructions Company Limited and Nagarjuna Construction Company Limited. The project was repeatedly delayed as it was unable to achieve financial closure. Finally, Satyam Constructions sold its stake in GPPL to GVK group. As of May 2005, GPPL was a joint venture led by the GVK group, with the following stakeholders: Nagarjuna Construction Company Limited (NCC), IJM (India) Infrastructure Limited (subsidiary of Malaysian IJM Corporation Bhd.) and Maytas Infrastructure Private Limited. GPPL achieved the financial closure for a 464 MW power plant in March 2004. The contract allowed GPPL to produce up to 598 MW. The reduced capacity was due to lack of availability of enough natural gas to power the plant. The project was estimated to cost Rs 145,000 lakhs (US $ 315 million). Additional capacity up to the approved 598 MW was expected to be built in a later phase. As of April 2005, the plant was under construction and was expected to be commissioned in June 2006. Alstom was the engineering, construction and procurement contractor for the project.