Energiser for mega power projects

The government has given itself a month to start the bidding for three ultra mega power projects, involving an investment of Rs 90,000 crore.

By Our Special Correspondent
  • Published 2.03.16
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New Delhi, March 1: The government has given itself a month to start the bidding for three ultra mega power projects, involving an investment of Rs 90,000 crore.

The cabinet will first vet the bid documents for the Bedabahal project in Odisha. After Bedabahal, it will start the bidding for Cheyyur in Tamil Nadu and Banka in Bihar.

<,>"Bidding out three ultra mega power projects (UMPPs)- Cheyyur in Tamil Nadu, Bedabahal in Odisha and Banka in Bihar - in this fiscal would attract an investment of approximately Rs 90,000 crore," this year's budget document on the implementation of last year's proposals said.

The Deoghar and Tilaiya projects in Jharkhand may be bid out in the next fiscal. They will require an investment of Rs 60,000 crore.

The power ministry has identified the five UMPPs for bidding, the document said.

The minimum investment for a UMPP of 4,000 megawatt (MW) was recently revised to around Rs 27,000 crore from Rs 20,000 crore in view of the higher cost of coal and land.

The power ministry had aborted the bidding process for Cheyyur and Bedabahal in January last year following a weak response from the private sector. Private companies, which had participated in the first round of bidding, had withdrawn citing difficulties in securing funds.

The power ministry decided to revise the bid document following the pull-out by private players.

They had expressed concerns over the design, build, finance, operate, and transfer (DBFOT) model for the projects. They argued that under the model, the risk was not apportioned equitably because all losses had to be suffered by the power producer, while gains went to the procurer.

Officials said the revised bid document balanced the risks between the power producer and procurer.

The Bedabahal project needs 3,246 acres, including 2,733 acres private land, 444 acres government land and the rest revenue forest land.

Meenakshi, Meenakshi-B and dip side of Meenakshi coal blocks have been allocated for the 4,000MW project. Its annual requirement of coal has been estimated at 19-20 million tonnes.