The power ministry, struggling to achieve the capacity addition target of 78,700mw in 11th Plan, has proposed public private partnership (PPP) model for the power sector.
The ministry?s suggestion is crucial as the private sector investment in the proposed capacity addition will be to the tune of Rs 2,36,286 crore of the total investment of Rs 10,59,113 crore.
The power ministry?s presentation (copy with FE?s) observed that given the Budget constraints and inherent inefficiencies, the public sector, too, cannot be fully relied upon and thus PPP model can be implemented.
According to sources, PPP model is also important as private sector participation in distribution and generation is increasing.
Besides many large generation projects, distribution licences for several cities are with the private sector.
?PPP is not just about investment but it encompasses a partnership between the government and private sector for construction, renovation, technology, maintenance, service delivery and financing.
Efficiency gains from private sector innovation can offset the higher cost of private financing. Incentive driven management can result in better service,” sources said. The opportunities can be tapped in captive, merchant power plants and ultra mega power projects.
Also, opportunities lie in joint ventures for coal mining and equipment manufacturing for the power sector.
Moreover, PPP model can be implemented in ash utilisation, augmentation of transmission lines and distribution franchisees.
Private and public sector companies can work together in the adoption of super critical and advanced super critical technologies to set up projects with generation capacities of 660mw and 800mw.
Sources mentioned that NTPC is expected to issue tenders for seven projects using super critical technologies.