However, he said that the ministry was open to the idea of allowing all those IPP projects which had a capacity exceeding 1000 MW, to sell power to the Power Trading Corporation (PTC), provided they brought their tariffs at par with those of mega power projects. The ministry would look into all such demands after April, 1999.

Speaking at a conference on mega power projects, organised by the Confederation of Indian Industry (CII), the minister said that the tax and duty concessions had been given only to the mega power projects, as the cost of power from these projects was much cheaper than from other power projects.

The cost of power from a mega power project will be anywhere between three to four cents per unit compared to the seven to eight cents per unit ofpower from other IPP projects. The IPPs should make their tariff comparable and competitive to ask for such concessions, he said.

"IPPs should not get perturbed over these concessions being extended to mega power projects, as for them these taxes are a pass through to the state electricty boards (SEBs)", Kumaramangalam said.

However, the minister said that he was in favour of a level playing field for taxes on fuels to be used for all power projects. He said that all the fuels should get the same tax concessions and that efforts were on to bring in tax parity in this case.

Kumaramangalam said that the government had asked the special independent group (SIG), looking into the modus operandi of setting up mega power projects, to finalise the request for qualification documents by January 15, 1999 and the request for proposal documents by Feburary, 15, 1999. The evaluation of bids which will be based on tariff will be done by March 15, 1999.

Vice chairman of RPG Group, Sanjiv Goenka, who is also the headof CII's national committee on energy and renewable energy, said that the IPPs had nothing against mega power projects, however, the tax and duty concessions along with other benefits in terms of speedy clearances for these projects had made them `preferred projects' of financial institutions when it came to financing of a power project.

"This is disturbing as many IPP projects which are close to financial closure are stuck for funds. Moreover, due to a limited exposure which these FIs can take in financing the power projects, the mega projects are being favoured over the existing IPPs, he said.