In order to facilitate speedy execution of power projects in the country, the government has decided to further liberalise its existing mega power policy. The ministry of power moved has moved a cabinet note proposing crucial amendments in the existing mega power policy.
Under the proposed revisions, it has been decided to do away with the mandatory reform condition for the power purchasing states, requiring them to undertake privatization of distribution in all cities, each of which has a population more than one million.
A senior ministry official said, ?This condition has been deleted as there is no unanimity amongst the states over privatizing distribution. Some states have expressed disagreement with such a mandatory requirement. Besides, there are alternate practical models like franchisee model for the same,? the official said.
Further the condition of inter-state sale of power may also be deleted. It has been proposed by the power ministry that in view of enlarged demand in states, 1000 mw can be absorbed in one state alone.
Keeping in view the need for enhancing generation capacity in the country, it has also been decided that the Captive Power Plants and Merchant Power Plants could also be brought under the ambit of this policy, if they fulfill the minimum qualifying capacity.
The qualifying threshold limit of projects eligible for mega power status is 1000mw in case of thermal and 500mw for hydel projects in states other than the projects located in J&K or in the seven states of North-East and Sikkim.
The revised mega power policy also clarified that in line with the stipulations of the Tariff Policy, all future procurement of the power has to be necessarily done through tariff-based competitive bidding.
In light of this requirement, it has been clarified that the developers of mega power projects will also be required to undertake either tariff-based bidding for the entire power to be produced or international competitive bidding (ICB) for procurement of equipment for the power project.
Alongside, in line with the exemptions granted to the power sector from purchase preference policy of the Department of Public Enterprises(DPE), the price preference which is available under the mega power policy is also proposed to be deleted explicitly in the revised policy.