Norms for coal, power companies to be eased

The power ministry is working on a Cabinet note to allow it to clear power projects up to Rs 1,500 crore. The move will expedite clearance of projects whose viability has been assessed by financing agencies and 65 per cent of the project cost has been worked out.

"The Committee of Secretaries (CoS) has approved our proposal, which will permit projects less than Rs 1,500 crore automatic approval after they get a techno-economic clearance. We will now go to the Cabinet," Power Secretary RV Shahi said. He was speaking on the occasion of the foundation day of the National Hydroelectric Power Corporation (NHPC).

The CoS had, in an in-principle approval, recently allowed an empowered group of secretaries to clear large capital projects. In the coal sector, projects up to Rs 1,000 crore will be allowed to be cleared by the administrative ministry. The approval pattern, which could be extended to other ministries, is to be reviewed after a year.

At present, all projects have to get a techno-economic clearance, after which they are recommended to the Public Investment Board (PIB) and then the Cabinet.

According to Shahi, the whole process takes more than a year, with the executing agency starting the bidding process only after receiving all clearances.

The proposal includes the setting up of a committee in the power ministry that will scrutinise all such proposals and approve them. The committee will have include representatives from the Planning Commission and the expenditure department in the finance ministry.

Once approved, the new system would help avoid time overruns in the crucial infrastructure sector, Shahi said.

More than 50 per cent of the projects would fall under the automatic route, Shahi said. He added that besides generation, transmission and distribution projects would also be included. Also, about 80 per cent of coal projects are expected to be cleared under the fast track mechanism.

The power ministry had also recommended Navratna status for Power Grid Corporation and NHPC. "NHPC's turnover and profit have been on the rise in recent years. We are trying for a Navratna status for the company. We are hopeful of getting it soon," Shahi said.

NHPC has posted a 20 per cent jump in net profit for the first half of the current financial year at Rs 338.21 crore as against Rs 281 crore in April-September 2003. Turnover during April-September 2004 grew 14 per cent to Rs 1,110.16 crore from Rs 968.35 crore in the same period last fiscal.

New proposals

• Power projects up to Rs 1,500 crore will get automatic approval
• Coal sector projects up to Rs 1,000 crore will also be allowed to be cleared by the administrative ministry
• The proposals are expected to expedite the projects clearance process, which takes more than a year at present