The Hindu Business Line : Ultra mega power projects may get delayed

Power woes
The fate of Sasan project is still hanging fire in the wake of controversies in the project's bidding process
Mundra ultra mega project to Tata Power took place behind schedule on account of delays in statutory clearances

New Delhi May 1 Despite the Government's attempt to tide over power shortages by setting up nine 4,000-MW each ultra mega power projects, the prospect of even a single project getting operational during the current Eleventh Plan period now appears bleak.

Contrary to the Government's contention that some units of these projects would get operational by the end of the Eleventh Plan, the Power Ministry, in a recent presentation before a high-level Parliamentary panel, has stated that it would not be possible to complete any of the proposed ultra mega projects during the Plan period and these would spill over to the Twelfth Plan (2012-2017).

Roadblocks

The Centre had issued Letters of Intent to the promoters of the first two projects — Tata Power Company for the proposed Mundra Ultra Mega project in Gujarat and the Lanco-Globeleq combine for Sasan project in Madhya Pradesh — on December 28 last year.

According to the Government's initial estimates, the transfer of the shell company to prospective promoters, besides the signing of the power purchase agreements and the submission of bank guarantees, was to have been done within 60 days of the issue of letter of intent (LoI) — by February 26 this year.

The fate of the Sasan project, however, is still hanging fire in the wake of controversies in the project's bidding process. PFC, which is conducting the bidding process for the ultra Mega projects, has refused to give a time frame for the award of the Sasan project.

The award of the Mundra Ultra Mega project to Tata Power took place behind schedule on April 23 this year, mainly on account of delays in statutory clearances to be obtained from the State Government.

The process of selection of successful developer for the third Ultra Mega project on the anvil — the Krishnapatnam project in Andhra Pradesh — has already been pushed back with respect to the earlier deadline of April 2007. PFC has deferred the date of submission of `Request for Proposal' twice (first deadline of March 9, second deadline of April 11), with the latest date being set at May 25 this year. PFC has not disclosed any reason for the delay.

The Centre had announced plans to develop nine Ultra Mega projects through tariff-based competitive bidding to expedite its capacity addition targets. These nine projects, each with a capacity of about 4,000 MW, were to add about 36,000 MW within a span of 6-8 years.

According to Government sources, the Sasan bidding imbroglio has affected the impetus to the Ultra Mega projects as a whole.

The delays could also raise question marks over the Centre's capacity addition target of 68,000 MW this Plan period.