New norms take care of issues related to imported coal

The much-talked about 4,000-MW each Ultra Mega Power Projects (UMPPs) at Cheyyur, Tamil Nadu, and Bedabahal, Odisha, are likely to see light of the day by the end of this year (calendar 2012).

“Odisha will come up first and then Tamil Nadu will follow. These two UMPPs will be finalised by the year-end certainly and ready for bidding,” a senior Power Ministry official told Business Line. Each power project of 4,000 MW would need investments of at least Rs 20,000 crore.

“For the Odisha UMPP, there is some problem related to land, which has to be resolved. The process has been expedited and will get cleared latest in three months. The Tamil Nadu project would take four months at least,” the official explained.

In June 2011, Power Finance Corporation (PFC) invited request for qualification – initial bids – for the Bedabahal UMPP. PFC is the nodal agency for creating the special purpose vehicle (SPV) for the projects, which is later transferred to the successful bidder.

According to reports, nearly 20 companies including NTPC, Tata Power, Adani Power, Lanco, GMR, JSW, GVK, L&T, Jindal Power evinced interest for the Bedabahal UMPP, based on domestic coal.

However, PFC is yet to invite initial bids for imported coal-based Cheyyur project for which environmental clearance is through.

Fuel-price fluctuations for imported coal-based units are a serious concern after bad experiences of units run by Tata Power and Adani Power.

The Power Ministry is expected to notify, within a month, standard bidding documents (SBDs) for projects to be put in place during the 12{+t}{+h} Five-Year Plan.

“Overall guidelines remain the same. The change is that the price of coal is to be passed through. This was not there earlier. Now, this clause has been added,” the official said.

Chhattisgarh project

At the same time, another UMPP at Chhattisgarh will take more time because of environmental clearances and other issues, said the official.

The Government has awarded four UMPPs, out of the proposed nine such projects.

Out of this, Tata Power has bagged the Mundra project, where it has started operating two units of 800 MW each.

Three other projects at Sasan, Tilaiya and Krishnapatnam have been awarded to Reliance Power.

(This article was published on August 2, 2012)
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