35 cos vie for `ultra mega' plants

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Govt to call bids for 2 more power projects soon; tariff-based bidding to be followed

MEGA RESPONSE: The Union Power Minister, Mr Sushil Kumar Shinde, and the Secretary, Mr.R.V. Shahi, at a roundtable conference in New Delhi on Thursday. S. Subramanium
MEGA RESPONSE: The Union Power Minister, Mr Sushil Kumar Shinde, and the Secretary, Mr.R.V. Shahi, at a roundtable conference in New Delhi on Thursday. S. Subramanium

Our Bureau

New Delhi, May 4

The Government has received expressions of interest (EoIs) from around 35 domestic and international companies to build four of the proposed "ultra mega" thermal power projects, each with an output capacity of 4,000 MW, at various locations across the country.

"We have got expressions of interest from big companies," Mr Shyam Wadhera, Director (Projects), Power Finance Corporation, which is co-ordinating the bidding process for the projects, said here on Thursday. Both domestic and international companies have shown interest, he said at the sidelines of a roundtable conference on investments in the "ultra mega power" projects.

Impressive line-up

Domestic companies that have submitted EoIs for the four projects include state-run National Thermal Power Corporation (NTPC), Tata Power Company, Reliance Energy, GMR Industries, GVK Power and Infrastructure, Essar Group, Torrent Power, Jindal Steel and Power and Jai Prakash Industries, Mr Wadhera said. Foreign companies such as AES Corporation (AES), China Light and Power, Korea Electric Power Corporation, Mitsui and Company, Suez Energy and Sumitomo Corporation have also submitted their bids, he added.

The first four plants will be located in Madhya Pradesh, Gujarat, Maharashtra and Karnataka, while the Government is soon expected to call for bids to build two more mega projects in Orissa and Andhra Pradesh. The Centre has already firmed up plans to award five of the six proposed projects over the next 12 months through a process of tariff-based bidding.

Power Finance Corporation has set up special purpose vehicles to conduct preliminary studies and obtain Government approval for the planned projects. These subsidiaries will be taken over by the companies that eventually win the bid to construct and operate the projects. The Government plans to extend tax breaks and ensure adequate supplies of coal for all the projects.

Luring investors

Last month, the Government had sent four teams to China/Korea, Australia/New Zealand, Europe and the US to promote the projects to foreign investors.

Talking about the response among investors abroad, the Power Minister, Mr Sushil Kumar Shinde, said that foreign investors are expected to bid in large number for these projects. "We had sent four teams. There has been very good response to our roadshows and many foreign companies have evinced interest in these power projects," he said at the sidelines.

The Power Secretary, Mr R.V. Shahi, said the Government had assured a three-tier payment security mechanism to bidders, comprising Letter of Credit, an escrow account and the option of selling power directly to high-tension consumers, in case of default.

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(This article was published in the Business Line print edition dated May 5, 2006)
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