The government is likely to exempt private players from tariff-based bidding till January 2011, to attract private participation in construction of hydro power projects.
With the move proposed by the power ministry, private players will not be required to quote the rate, which would be charged for per unit sale of energy during the time of bidding. Currently, only the public sector players enjoy this exemption. The move is expected to help meet the ever growing energy needs of the country.
The rate will be decided later depending on the market once the project is completed. The developers, who fail to conform to the prescribed time limits, will be penalised and will loose the incentive of merchant sales in a graded manner?5% loss for each six months of delay in completion.
To achieve the exemption under the Tariff Policy, 2006, the state governments will have to follow a transparent selection criterion for awarding the sites for development of the projects to the private players.