The Hindu Business Line : ‘Ultra mega power developers should not bid for another project’

A Parliamentary Committee has suggested that developers of ultra mega power project (UMPP) who have already bagged one project should not be allowed to bid for another on the basis of the same balance sheet on which the earlier project was won.

The Parliamentary Standing Committee on Energy, however, feels that if the balance sheet was so strong that it could meet the eligibility criterion for two power projects together they may be permitted to bid.

The Committee, which laid its report in Parliament on Friday, feels that doing this would not only encourage competition but also ensure that projects are not monopolised by a few companies.

A project having a capacity of 4,000 MW or more is called an ultra mega power project.

The Committee has recommended that the Ministry of Power devise a formula, which assures a reasonable share of the power generated from the UMPP located in their State.

The Committee is of the opinion that a formula be devised taking into consideration various factors such as power shortage in the State and the status of infrastructure for evacuation of power, among others.

“The allocation on the basis of a formula should be completely objective leaving no scope for any grievance from the States. Besides, the State governments should be involved in during the whole process of development of UMPP,” the report states.

At the moment, Reliance Power, promoted by the Anil Dhirubhai Ambani Group is developing the Sasan UMPP plant in Madhya Pradesh, while Tata Power Ltd is undertaking the development of the Mundra UMPP in Gujarat.