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Home News Power Sector News More UMPP bids in April 2010 to make up the slippage

More UMPP bids in April 2010 to make up the slippage

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Power ProjectThe government will bid out Bedabahal (Orissa) and Kotipalli (Andhra Pradesh) ultra mega power projects (UMPPs) of 4000mw each in April 2010 to make up for the slippage in power capacity addition in previous years. The government had planned to set up nine UMPPs in the Eleventh Plan (2007-11). But due to various issues such as availability of land, water supplies and public unrest it has managed only four so far. In the Eleventh Plan while 768,577 MW was targeted, power ministry scaled it down to 62,000 MW. Capacity addition assumes importance as country faces high energy deficit of 9.9% (2009-10 upto January) and peak deficit of 12.6%.

“Projects at Bedabahal (Orissa) and Kotipalli (Andhra Pradesh) are close to getting requisite clearances from the Centre and states.... We hope to invite request for qualification (RFQ) for the two UMPPs next month,” power secretary H S Brahma said. The ministry has asked the nodal agency for UMPPs, Power Finance Corporation (PFC), to complete formalities for inviting bids at the earliest. Besides the two projects, the government is all set to invite bids for Chhattisgarh UMPP also in April.

Apart from the three UMPPs where clearances are expected to be given on a fast-track basis, the power ministry is also pushing for an additional UMPP at Cheyyur in Tamil Nadu. The state government has confirmed the project site along with a captive port at Paramankeni for development of the UMPP. “Only the coastal regulation zone (CRZ) and the environment-related issue remain to be resolved,” an official of PFC said.

It took almost four years to award four UMPPs mainly due to policy and regulatory hassles. But now the government has put power projects on the fast track and is confident of awarding three more UMPPs by 2010-11. While clearance for Orissa UMPP is in advanced stage, the Andhra project still has to get several regulatory clearances pertaining to land and environment. The PFC has also not formed a special purpose vehicle with respect to this project. The government is hopeful to fast-track approvals at Kotipalli as identified site is largely free from encumbrances.

The completion of bidding process for three UMPPs over next few months will improve the ministry’s performance significantly. During the previous UPA government, the ministry was criticised for being slow on achieving the generation targets.

The Centre has so far awarded four UMPPs to private developers — Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh), Mundra (Gujarat) and Tilaiya (Jharkhand). While Mundra UMPP is being developed by Tata Power, the remaining three UMPPs have been bagged by Reliance Power.

The government plans to add 78,577 MW of generation capacity in the Eleventh Plan. UMPPs are conceived to achieve the ambitious target. But it is unlikely that UMPPs will start power generation in full capacity by the end of 2011. UMPPs may, however, add over 36,000 MW power generation capacity in the Twelfth Plan. The government targets to add 100000 MW of additional capacity in the Twelfth Plan.

The UMPP are being viewed as saviour for government power capacity addition programme as due to its sheer size only a handful of projects could deliver power equivalent to several conventional sized power projects. The capacity addition programme of the government has been shoddy in the past. In the Ninth and the Tenth Plans, less than 50% of the targeted capacity was added.

Source- Economic Times


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