The Hindu Business Line : `Ultra-mega' power plants — Generation cost to be under Rs 2 per unit

THE proposed `ultra-mega' power projects, to be set up by private players at five sites with capacities of over 4,000 MW each, are likely to generate electricity at a cost of under Rs 2 per unit.

"The generation cost for these plants is estimated to be between Rs 1.50 and Rs 1.80 per unit," the Central Electricity Authority (CEA) Chairman, Mr Rakesh Nath, said on the sidelines of a seminar on energy efficiency here.

He said two plants would come up at pithead locations in Chhattisgarh and Madhya Pradesh and will use domestic coal as fuel. Two other projects would be at coastal locations in Karnataka and Gujarat and would use either imported coal or a blend of domestic and imported coal. A fifth project is likely to come up at Ratnagiri in Maharashtra, he said adding that a team from CEA would visit the State next week to finalise the location.

The Ministry of Coal has "responded positively" to the two projects, fuel linkages would have to be finalised by the private companies that eventually get these projects, said Mr Nath.

Power Finance Corporation has been appointed as the nodal agency and it will set up five special purpose vehicles for each of the power projects. It will also invite expressions of interest for these plants by the end of this month or early next month. These shell companies will work independently to get all the necessary approvals, after which these will be transferred to potential investors by the end of 2006.

Power Finance Corporation would also appoint consultants for conducting various studies by this month end, register the five companies with the Registrar of Companies by February-end and invite bids within two months. The projects will be ready for transfer to potential investors by December this year.

The projects will be transferred to private players through a bidding process based on the least first year tariff quoted. The bids for pre-qualification, which are likely to be invited by March-end, as well as the final bids of investors will be evaluated by senior officials of Power Finance Corporation and CEA.