The government will kickstart next month the bidding process for two ultra mega power? projects, each exceeding a capacity of 4,000 MW, ending three years of uncertainty. ??
Sources in the power ministry said that Power Finance Corporation (PFC), the nodal agency for UMPPs, will invite pre-qualification bids (request for qualification or RFQ) for UMPPs at Bedabahal in Orissa and Cheyyur in Tamil Nadu in the second half of August and? award these projects to successful bidders by January. This, they said, is part of a larger government initiative to expedite implementation of large infrastructure projects.
The infrastructure sector is targeting investments of about $1 trillion in the 12th Plan period. The Prime Minister?s Office, along with various infrastructure sectors ministries, is trying to ensure all impediments in the way of investments in these sectors are removed.
Power ministry sources said that PMO has also directed that awarding of these projects should be completed at the earliest so that at least one unit of either 660-MW or 800-MW capacity comes into the system before the end of the 12th Plan (2012-17). The decisions were taken at a meeting of a steering group chaired by PM’s principal secretary, Pulok Chatterji, with secretaries of various infrastructure ministries on July 19.??
??UMPP is an important programme of the government as it helps create large-sized power capacities that would accelerate the pace, bridging the power deficit situation in the country. The PMO has directed us to start the bidding process for Orissa and Tamil Nadu UMPPS in August, and we would be ready with RFQ once the government finalises standard bidding document for such projects over next couple of weeks,? said a top official of PFC that has the responsibility for conducting the bidding.??
The new norms (SBD) will address the contentious issue of passing on the increase in raw material price to the end consumer in case of unforeseen circumstances even for project with tariff-based bidding. Many private players have approached the Centre to allow them to increase the tariff of imported coal-based projects after Indonesia linked its fuel prices to the international market in 2011.
The government started bidding for the two UMPPs (Orissa and Chhattisgarh) in 2010. But it has been stuck ever since due to a confusion created by an earlier environment ministry categorisation on dividing coal-bearing areas in the country in ‘go? and `no-go? mining zones.
While roadblocks for the Chhattisgarh UMPP will still take time to clear, government intends to push through the Orissa project based on domestic coal where issues related to environment and forestry clearance have been resolved. In case of Cheyyur, though the project is based on imported coal, it got stuck for want of environmental clearance. A ministry of environment and forest expert appraisal committee has now recommended the project for clearance for building construction, coastal regulation zone, infra development and miscellanoes projects. Only SBD is now being awaited.?
The 4,000-MW power projects requires an investment of about Rs 20,000-25,000 crore. The government is banking on these large projects to address the problem of widening demand-supply gap in the power sector. With large capacities, a few of these projects could help in fast tracking the country?s capacity addition programme and bail out the government struggling in meeting its targets.
The power ministry originally planned to set up nine UMPPs, with four projects at pithead and five in coastal locations. PFC has already allotted four projects of which three have been bagged by Reliance Power in Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand). The fourth, at Mundra in Gujarat, has been bagged by Tata Power.