'Direct nod for power projects below Rs 15bn'

Power Ministry will soon approach the cabinet with a proposal that allows all projects below Rs 15 bn automatic approval.

Under the new mechanism, an empowered committee would be set up once the cabinet gives its nod to the proposal. The committee, headed by the power secretary, would scrutinise all power projects with a cap of 15 bn and the final approval would be given by the Power Minister, sources said.

At present, all projects have to get techno-economic clearances and environmental approvals after which they are recommended to Public Investment Board and then the cabinet.

The whole process usually takes more than a year and adds to the cost and time over-runs. The executing agency starts the bidding process only after receiving all clearances.

The need for such a mechanism arose after repeated requests from public sector companies, notably National Hydroelectric Power Corporation and Power Grid Corporation to grant early approvals.

Once approved, the new system would help avoid time and cost over-runs in the crucial infrastrucutre sector as the projects will not need to approach the Public Investment Board and Cabinet for approval.

As per the proposal, the committee would scrutinise all such proposals and approve them. The Empowered Committee would have representatives from Finance Ministry and Ministry of Environement and Forests and other concerned ministries.

The committee of secretaries has already approved the proposal, sources said, adding more than 50% of the projects would fall under the automatic route including generation, transmission and distribution projects.