Reliance Infrastructure said it has received Rs 94 crore from the Goa government against the arbitration award of Rs 350 crore and the proceeds will be used to pay lenders and reduce the company’s debt.
It also said it will request the state government to pay the balance of 75 per cent of the arbitral award against the bank guarantee “immediately”.
In a regulatory filing, the company said that the Arbitration Tribunal, last year, had ordered the Goa government to pay it Rs 350 crore, including interest.
“The matter went into arbitration when Goa state utility delayed payments to Reliance Infrastructure for power supplied from its 48 MW-Goa Power Plant in Sancoale,” the company said.
“The Arbitral Tribunal has also directed that in the event of Government of Goa fails to comply with the award, interest at the rate of 15 per cent per annum will be payable in favour of Reliance Infrastructure Ltd,” it added.
The Goa government entered into a power purchase agreement with Reliance Infrastructure on January 10, 1997 to commission and operate an open cycle electricity generation station of 39.8 MW at Sancoale in the state.
The station was to be operated by the company on naphtha, subject to the parties consensually agreeing to the use of any alternate fuel.
The term of the PPA was 15 years from the date of commencement of commercial operations of the station on August 14, 1999.
“During the term of the PPA, several disputes arose between the parties regarding the computation and payment of invoices raised by the company under the period utilising naptha as well as the subsequent period in which there was a shift to regasified Liquified Natural Gas,” the company said in the regulatory filing.
As a result, July 31, 2014, Reliance Infrastructure invoked the dispute resolution provisions under the PPA and the matters were placed before an arbitration panel, it added.