Odisha, Tamil Nadu UMPPs to be linked to surplus coal policy

The proposed ultra mega power projects in Odisha and Tamil Nadu will be linked to the government's surplus coal policy as and when the latter is finalised.

According to a Power Ministry official, the invitation of initial bids for the upcoming 4,000 MW ultra mega power project (UMPP) each in Odisha and Tamil Nadu will come on time and a decision on the surplus coal policy will be linked to it.

Surplus coal policy will enable the usage of excess coal from the mines allotted for a project to another project of the same company.

"So when the policy gets finalised, it will automatically be linked to the UMPPs. The EGOM (Empowered Group of Ministers) has also approved this proposal when it finalised the Standard Bidding Documents (SBDs)," the official said.

Some of the private power producers had expressed concerns over bidding for the proposed UMPPs -- Bedabahal (Odisha) and Cheyyur (Tamil Nadu) as the surplus coal policy is yet to be finalised.

In August 2008, an EGoM had given approval for Reliance Power to divert surplus coal from the Sasan blocks for another project in Chitrangi. Both projects are in Madhya Pradesh.

Referring to this case, the private power companies had said the government should come up with clear cut guidelines for the usage of excess coal from the captive mines.

The surplus coal policy will be decided in consultations with various ministries including Power, Coal, Law and Environment and Forests.

Another EGOM headed by Defence Minister A K Antony, last month, cleared the proposal of amending the standard bidding documents for implementing the new Case-II thermal power plants including the 4,000 MW UMPPs.

Case-I projects are where developers have the choice to decide on location, fuel and technology to be used.

In Case-II thermal power projects, the location of the project and fuel to be used are already decided before the start of competitive bidding.

The Government has so far allotted four UMPPs. The first at Mundra in Gujarat was awarded to Tata Power, which has already commissioned the plant. Reliance Power bagged the others - Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand).

UMPPs are coal-based generation projects with an average capacity of 4,000 MW.