Government not ready for new ultra mega power projects

NEW DELHI: The power ministry could end up with egg on its face if it sticks to its decision to bid out this month two showcase projects envisaging a combined investment of Rs 40,000 crore as hardly any ground work has been completed. The ministerial panel last week refreshed the standard bidding documents for new ultra-mega power projects.

Taking this as a cue, top ministry officials have been talking of plans to launch two such projects in Odisha and Tamil Nadu this month with a total capacity of 8,000 mw.


But the records of a recent meeting, called by the senior ministry official in charge of UMPPs to review government's preparedness, makes it clear that the government is simply not ready to launch the projects.

The idea of UMPPs of 4,000 mw each was conceived as a way to leapfrog generation capacity addition. The projects are implemented in partnership with the private sector, which bases its bids, by way of per-unit cost of electricity, on the estimated quantity of coal in the captive blocks and other facilities.

State-run Power Finance Corporation functions as the nodal agency and invites bids after fully tying up land, fuel, water and environmental as well as forest clearances. Four UMPPs have been bid out. Two of them, Tata Power's Mundra and Reliance Power's Sasan have started production. Progress in two others, Tilayia and Krishnapatnam, remain stuck due to issues such as escalation in cost of fuel and water.

According to the records of the meeting, the process of acquiring private land for the Odisha project is yet to be completed. But with the new land acquisition Act, the entire process would have to be started from scratch. Even the coal blocks designated to fuel the pant is far from ready. Central Mine Planning and Development Institute, an agency under the coal ministry, is yet to prepare the geological report for the block, essential to estimate coal reserves.

Applications for environment and forest clearances are to be resubmitted. Both these clearances involve long-drawn process. Even handing over of government land is yet to be completed — both for the Odisha and Cheyyur projects. The latter also does not have environment and forest clearances. Sources said by any reckoning it would be three to four years before work can start on the ground.