Victory for IPP in escrow row with Karnataka

Vol 4, PW 7 (10 May 00) News in Brief

A court in Karnataka has snubbed state government attempts to withhold escrow cover for Independent Power Producers (IPPs).

On 4th May, the Karnataka High Court directed the Karnataka Power Transmission Corporation to re-instate escrow cover to the 220-MW Tannir Bhavi barge-mounted power project promoted by Hyderabad-based GMR Vasavi Power Corporation. GMR Vasavi took legal action following the state's decision to withhold escrow cover, citing a recommendation from the 'Deepak Parekh' report.

On 6th April, Karnataka Chief Minister SM Krishna told the local state assembly that escrow was "unscientific and unimplementable."