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PowerMin keen to fast track award of Odisha, TN UMPPs

Goyal eager to show ‘concrete achievement’ in 100 days’ report card

The Power Ministry is racing against time to award two ultra mega power projects (UMPPs) which are to come up in Odisha and Tamil Nadu, before the completion of the NDA Government’s 100 days in office on September 6. The problem though is that the 17 short listed bidders have asked the Government to not only identify land for these projects but also acquire it for them, something for which the Request for Proposal (RFP) will be required to be amended as per provisions of Land Acquisition Act.

With the NDA Government keen on amending certain key aspects of the said legislation, the changes in the RFP document could become a time consuming exercise and meeting the aforementioned deadline could be a tough ask.

However, with Power Minister Piyush Goyal eager to show a concrete achievement during the first 100 days of his heading the crucial ministry, the Central Electricity Authority (CEA), official sources said, has been asked to make the necessary changes in the terms and conditions of the RFP document as soon as possible before September 6, so that the awarding of the two UMPPs having 4,000 mw capacity each, can be facilitated at the earliest.

Prime Minister Narendra Modi is likely to seek a performance review from all the ministries in the first week of September, as by that time the NDA Government will complete its 100 days in office. Sources privy to the development said that owing to the fact that bidders had sought changes in the RFP document and also because of the impending Lok Sabha polls, the date of submission for price bids for the two UMPPs had been extended from the original February 26 to the end of June. The NDA Government further extended this deadline till September as the CEA, which had been directed by the then Power Minister Jyotiraditya Scindia to make the necessary changes in the RFP document, is still working on them.

In this light, therefore, it won’t be easy for the Power Ministry to hurry the process, as the changes in the RFP document’s terms and conditions, sources pointed out, are being made as per the Section 6 of the Land Acquisition Act. The legislation itself could be subject to changes, as the NDA Government has indicated on more than one occasion, that it is open to review some of its provisions.

The Rural Development Ministry had recently suggested a number of amendments to the Land Acquisition Act which could water down pro-farmer provisions like mandatory consent of at least 70 per cent locals for acquiring land for PPP projects and 80 per cent for acquiring land for private projects.

The Act enacted during the UPA Government is likely to go undergo drastic changes if Modi approves the Rural Development Ministry’s proposals which also include dilution of a key clause of Social Impact Assessment study, criticised by States as time consuming for industrialisation process.

As of now, land for public private partnership (PPP) projects is only identified by the Government. The developer has to acquire it as well as pay for it. For the two UMPPs in Odisha and Tamil Nadu, the bidders, sources said, requested the Power Ministry to identify as well as acquire land for them while they were ready to pay for it.

Apart from this the bidders have also sought some other changes in the RFP document related to floating interest rates and regulatory tariff regime for the projects, sources informed.

The two UMPPs are worth Rs 49,200 crore and will come up in Bedabahal in Sundargarh district of Odisha and in Kanchipuram district of Tamil Nadu.

The UMPP in Odisha will be a pit-head project which will based on domestic coal to be sourced from allocated captive coal blocks, and will entail an investment of around Rs 25,000 crore. The Kanchipuram UMPP is a coastal project to be run on imported coal and will require an investment of Rs 24,200 crore. This would be the country’s third coastal UMPP after Mundra in Gujarat (Tata Power) and Krishnapatnam in Andhra Pradesh, operated by Reliance Power.

Power Finance Corporation (PFC), which manages the bidding of UMPPs, had short listed nine companies for the Odisha project and eight companies for the Tamil Nadu UMPP.

The nine companies in the race for the Odisha UMPP are NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power, Sterlite Infraventures, CLP India, and Larsen & Toubro (L&T).

Meanwhile for the Tamil Nadu project, companies like Adani Power, CLP India, GMR Energy, Jindal Power, JSW Energy, L&T, NTPC, and Sterlite Infraventures are in the fray.

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