Reliance Infrastructure on Friday said it has received Rs 94 crore from the Goa government against the arbitration award of Rs 350 crore.
The company will request the Government of Goa to pay the balance of 75 per cent of the arbitral award against bank guarantee immediately as per a recent Niti Aayog circular, RInfra said in a statement.
The proceeds will be used to pay lenders and reduce the debt of company, it said. Reliance Infrastructure, which is sitting on a debt pile of up to Rs 6,000 crore, aims to be debt-free in 2020.
The arbitration tribunal, on February 16, 2018, had ordered the Government of Goa to pay Rs 350 crore, including interest, in favour of Reliance Infrastructure. The arbitration pertains to the delayed payment by the Goa state utility for power supplied from RInfra’s 48 MW plant in Sancoale in Goa.
As per the order, the Goa government deposited Rs 50 crore in court in November this year and Rs 44 crore on December 20, RInfra said.
“The arbitral tribunal has also directed that in the event 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,” the statement said.
On January 10, 1997, RInfra and the Goa state utility entered into a 15-year power purchase agreement. However, 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 LNG.
As a result, on July 31, 2014, RInfra invoked the dispute resolution provisions under the PPA and the matters were placed before a panel. The company also filed claims before the Joint Electricity Commission in petition 167/2015.
On an application by the state under Section 8 of the Arbitration and Conciliation Act, 1996, the JERC referred the matter to a sole arbitrator on December 11, 2015 for resolution which passed its award in favour of RInfra.
Source: Business Standard