The proceeds of this will go into the kitty of the proposed Power Development Fund (PDF) to be set up by the government for promoting the development of power projects in the country.

The ministry is working out the details for levying this cess, which will come into effect once the cess act comes into force. It is reliably learnt that the cess to be imposed will be in the range of 10 to 15 paise per unit of electricity generated.

Two third of the proceeds after levying this cess will be utilised to promote power development by the state governments and the balance one third will be for promoting the central sector power projects.

This was stated by union power minister PR Kumaramagalam while addressing a press conference in the capital on Friday.

The minister said that a bill for cess would be introduced in the winter session ofParliament and it could be operational by the next Budget session. Kumaramangalam further disclosed that the securitisation procedures on recovering dues from the state electricity boards (SEBs) will soon be placed before the Cabinet for clearance.

However, Kumaramangalam did not elaborate on the exact procedures for securitising the dues but said that it will be done by way of the central plan assistance to the states.

It is interesting is to note here that the security package for the smooth functioning of the Power Trading Corporation (PTC) is also being planned from the central plan assistance to the states.

How the ministry plans to take care of both the securitisation of dues as well as the security package for PTC, from the central plan assistance which is limited to a mere 15 per cent, is being seen as a big question mark. Meanwhile, the minister made it very clear that the states who do not agree to settling of dues from the plan assistance given to them, will not be given power from thePTC.

On the bankability of the PTC, the minister said the trading body would go in for a tripartite agreement, involving the power generator, SEB and the RBI, which will give PTC the right to claim the devolution of state funds.

Making a presentation on the "Power Vision India-2010", Kumaramangalam said that capacity additions to the tune of 80,000 mw have been planned and that a national grid will be put in place for improving the supply of power.

Kumaramangalam said that the government would soon come out with a notification which would facilitate non requirement of techno-economic clearance (TEC) from Central Electricity Authority (CEA) for projects costing about Rs 5,000 crore. Moreover, the energy conservation Bill was being finalised and would be presented to the Parliament soon that would include system of incentives and disincentives for encouraging energy conservation, the minister added.

Talking about the mega power projects, Kumaramangalam said that in the public sector National ThermalPower Corporation (NTPC) would be setting up projects of about 7000 mw based on coal and 5200 mw on gas.

National Hydro Power Corporation (NHPC) will establish five projects with a capacity addition of about 3100 mw, while the private sector would add 4,500 mw using the domestic and imported coal. In the private sector, three projects of 4500 mw are proposed to be set up using domestic and imported coal and one project of 100 mw based on LNG. Two more LNG projects will be considered later, Kumaramangalam added.

The Hirma project in Orissa of 3960 mw would also be developed as a mega project once the issue regarding twelve per cent free power is resolved.The Central Electricity Regulatory Commission (CERC) would become fully operational next month.

This, the minister said, would enable rationalisation of tariffs and orderly development of competitive conditions in the power sector. Two state commissions have also been set up while ten more is on the anvil.

The minister giving a detailed account of thesteps initiated by him over the last six months said the government now has a shelf of 40 projects of 22,000 mw which have been cleared by CEA and these can now proceed towards financial closure.

On automatic approval for foreign equity, he said that the government has decided that the projects for generation, transmission and distribution will be permitted to 100 per cent on the automatic approval route.