Govt firm on early closure of big power projects

The power ministry has finalised aggressive timelines to ensure early closure of two of the ultra mega power projects "" Sasan (Madhya Pradesh) and Mundra (Gujarat).

Despite requests from the bidders, the last date for bid submission has been retained at November 22, while bid opening has been scheduled for November 29.

The final awards of the projects will be announced within the deadline of December 31. The ministry has also decided that the power purchase agreements for the 4,000-Mw projects would be signed by February 22, 2007, after which the projects will be handed over to the winning bidders.

The bidders for both the projects include Tata Power, Reliance Energy, Sterlite and Torrent, while Essar, NTPC GMR-China Light and Power and Jindal have bid only for Sasan. Gujarat-based Adani group has bid only for Mundra.

These projects are being worked through special purpose vehicles which will do the basic groundwork like preparing a detailed project report, acquiring land, getting all clearances from government agencies as well as signing PPAs with the buyer states.

Till date, Power Finance Corporation, which is the lead agency for these projects (totalling seven), has floated four SPVs for the projects in Sasan, Mundra, Tadri (Karnataka) and Girye (Maharashtra).

The SPVs for Krishnapatnam in Andhra Pradesh and Bhasma in Orissa are awaiting approval from the Registrar of Companies.

These two projects are expected to be awarded by April next year. The project in Chhattisgarh is on hold, with the BJP-ruled state government demanding free power from the project.