The Hindu Business Line : ONGC to hold 50% equity in Tripura power project

Revised structure br>Power project plan changed thrice since 2005
Revised structure to ensure `fast track implementation'
ONGC has to get approval of board for new plan

New Delhi/Kolkata , Oct. 25

ONGC is set to play a dominant role in 750-MW gas based power project in Tripura. The company has been asked to implement the project through a single special purpose vehicle (SPV) for both generation and transmission where the oil and gas major will hold a 50 per cent stake.

With this development, the project has undergone a change for the third time since 2005. Initially, the project was to be implemented through two SPVs. Subsequently, early this year, the power generation project was brought under the ONGC fold and the transmission continued to be implemented through an SPV.

Smooth implementation

The move is expected to iron out the problems faced by the twin projects of generation and transmission, with the issue of transmission causing delay in implementation. ONGC would now go ahead on the power project without any hiccups, and invite private participation for the rest of the equity holding in due course. A decision to this effect was taken during a meeting of the Tripura Chief Minister, Mr Manik Sarkar, with the Petroleum Minister, Mr Murli Deora. The Power Minister, Mr Sushil Kumar Shinde, and CPI (M) leader, Mr Sitaram Yechury, were also present at the meeting.

IL&FS will play the role of a facilitator for the project. As per the original structure, ONGC was to take up the Rs 2,400-crore generation project on its own balance-sheet and was allowed to hold up to 26 per cent stake in the SPV slated to create 630 kms l400 KV transmission facilities from Palatana in Tripura to Bongaigaon in Assam at an estimated cost of Rs 1,600 crore.

While ONGC had already obtained board approval for the power generation part, delays in roping in a majority partner in the transmission project was delaying the commissioning of the power plant, company sources said. When contacted by Business Line, the ONGC Chairman, Mr R. S. Sharma, while terming the meeting as a success said that the revised structure would ensure "fast track implementation of the power project."

Tax holiday

Besides, the company has also been offered a tax holiday for the generation cum transmission project by the State Government. As the project would require an additional production of 3 mmscmd of natural gas in Tripura, the State Government would gain roughly Rs 40 crore per annum through royalty.

According to the Board's plan, ONGC was to set up the power plant at Palatana and the generated power was to be then transmitted by utilising the services of another SPV company, the North-East Power Trading Corporation (NEPTC), for up-linking with Powergrid Corporation's network at Bongaigaon. This project was estimated to cost around Rs 2,087.6 crore and was to be implemented by end-2009.

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