The Orissa government is bringing about changes in its existing power policy towards independent power producers (IPPs), deleting huge portions of it to fit into the requirements of the upcoming 4000 Mws ultra mega power plant ( UMPP) in Sundergarh at an investment of around Rs 16,000 crore.
The changes are being brought about on the latest recommendations of the government task force on power on proposed MoUs with future IPPs, existing IPPs and also the Sundergarh UMPP.
Power Finance Corporation ( PFC) plans to initiate the tariff-based bidding process for the Sundergarh UMPP by the beginning of 2009. The bidding process for 3 out of 9 proposed UMPPs across the country is already over with Tata Power winning one and two going to Reliance Infrastructure Limited of the ADAG consortium.
PFC feedbacks are that after the Sasan UMPP in Madhya Pradesh, Mundra in Gujarat and Krishnapatnam in Andhra Pradesh, Orissa’s Sundergarh, Jharkhand’s Tilaiya and Girrya of Maharashtra are in line. It is now for the PFC to decide where to initiate the bidding process for the country’s fourth UMPP.
Cheyyur in Tamilnadu, Tadri in Karnataka and Akaltara in Chattisgarh are next in line to complete the bidding of nine UMPPs.
Under policy guidelines worked out by the task force, the Sundergarh UMPP, proposed to be set up through a special purpose vehicle ( SPV) - Orissa Integrated Power Limited ( OIPL), will have to primarily sign a MoU with the state government for necessary support in getting various clearances and R&R measures.
The SPV has been formed with 8 states as its stakeholder. Almost 67 per cent of the power generated at the Sundergarh UMPP will be wheeled out to Punjab, Rajasthan, Uttaranchal and Tamilnadu.
Coal for the project will be sourced from Meenakshi, Meenakshi B and Dip Side Meenakshi with a combined reserve of around 855 million tonnes of coal. The water will be provided either from Hirakud or the tributaries of Bhende river flowing through Jharsuguda.
Setting aside all state policy guidelines relating to power, it has been decided by the Orissa government that only the terms and conditions of the Union government will be applicable for the Sundergarh UMPP.
The Union ministry of power ( MoP ) has already decided on allocating 1300 Mws of electricity to the state out of the proposed 4000 Mws near Bedabahal.
The changes brought about in its existing policy towards IPPs by the Orissa government include the deletion of the major condition relating to making available power generated by the UMPP in excess of 80 per cent PLF to the state at a variable and cost plus incentive.
The policy on supply of infirm power to the state from the Sundergarh UMPP at a variable cost has also been dropped. It has been decided in such a case the Union government laws and regulations will only be applicable.
A nominated agency or agencies authorised by the state government will have the right to purchase up to 50 per cent of the power from the Sundergarh UMPP as against the existing policy of 25 per cent purchase from the plant as per the tariff fixed by the state regulatory commission. The power purchase will be done through competitive bidding at the lowest bid price only.
The existing stipulation of annual contribution of 6 paise per unit of energy exported by the plant and not sold in the state to a Environment Management Fund ( EMF) has also been cancelled. Such a condition will not apply for the Sundergarh UMPP.
As for the rehabilitation of the land oustees the UMPP will have to follow the state rehabilitation and resettlement policy ( R&R) and also contribute 5 per cent of its profit for peripheral development fund ( PDF).
