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The Power Ministry has sought the approval of the Cabinet Committee on Investment (CCI) to tweak land acquisition norms for ultra mega power projects (UMPPs).
“The nodal Ministry has approached the CCI to change the policy wherein the UMPPs should be considered Government undertakings when it comes to land acquisition,” a senior Power Ministry official told Business Line .
The government defines a UMPP as a power plant with an installed capacity of around 4,000MW.
This means it would not be mandatory for the project developer to provide non-forest land to compensate for the loss of forest land to be acquired for the power station. The developer can deposit the cost of the land with the State, governed by the Forest Conservation Act, 1980. Currently, this benefit is open only for Central Government or Public Sector Undertakings.
The special dispensation sought by the Ministry is only for land acquisition and others clauses would not be changed, it was said.
The Power Ministry has taken the step after a problem arose with the 3,960-MW Tilaiya project in Jharkhand, which was secured by Anil Ambani-promoted Reliance Power Ltd.
The private power producer is not able to give back to the State non-forest land as compensation for diverting forest land for the power project. The Jharkhand Government has not transferred the entire land to the mega project. The Tilaiya UMPP requires nearly 1,570 acres for the power station and another 4,000 acres for mining coal.
“The problem has arisen in the Tilaiya project. But we want to make it a policy change to prevent such problems that cause delay to the ultra mega projects. So, we want the CCI to decide on it,” said the Power Ministry official.
If the proposal is approved by the Prime Minister-headed panel, it would apply to the four existing and coming projects. However, the Ministry of Environment and Forests has opposed the Power Ministry’s move.
In the case of ultra mega projects, Power Finance Corp Ltd, the state-run company engaged in extending financial assistance to the power sector, sets up a special purpose vehicle (SPV) which secures the mandatory clearance and land. After the competitive bidding; the SPV is transferred to the winner.
In 2009, Reliance Power won the Tilaiya project. But land acquisition was not complete. According to the information on the company’s Web site, ownership has been transferred for 186 acres of private land; stage II forest clearance has been received and final handover is expected shortly for 1,220 acres of forest land and final approval is expected for another 167 acres of Government land.
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