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The agony seems to be piling up for Reliance Power’s Krishnapatnam Ultra Mega Power project (UMPP). CNBC-TV18 learns from source that the Anil Ambani-led power company is unable to raise funds for the project. The building at the site has come to a standstill according to a CEA (Central Electricity Authority) report.

Sources say Reliance Power has written to the Andhra Energy Department to sort out the issue. They add that the Power Ministry has directed Reliance Power and the state government to meet to discuss the issue.

Reliance Power is likely to ask for hike in the Krishnapatnam tariff. The tariff right now is at Rs 2.33 per unit. Sources at Reliance Power say the cash flow crunch is mainly due to higher coal prices.

The coal for Krishnapatnam is being imported from Indonesia. The new Indonesian coal price regulation doubles costs. The Krishnapatnam UMPP cost is estimated at Rs 17,450 crore. Shares of Reliance Power were down 1.15% at Rs 111.60 in early trade.

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