The Power Finance Corporation is expected to spend around Rs 70 crore for preparing the detailed project reports and allied activities for shell companies of the seven ultra mega power projects of 4,000 Mw each. |
The total investment on the seven projects will be around Rs 1.12 lakh crore. |
"It will take around Rs 10 crore for initial expenditure on establishment and operationalisation of the SPV for one project funded by the corporation (PFC). However, this does not reflect the cost of land acquisition," a PFC official told Business Standard. |
So far, the special purpose vehicles (SPVs) for Sasan, Mundra, Girye, Tadri and Akaltara have been set up and chief executives for these SPVs have been appointed. |
SPVs that have been incorporated are Sasan Power Ltd, Coastal Gujarat Power Ltd, Coastal Maharashtra Mega Power Ltd, Coastal Karnataka Power Ltd and Akaltara Power Ltd. The SPVs for the Ib Valley project in Orissa and Krishnapatnam in Andhra Pradesh are yet to be set up. |
"The land acquisition for these projects is yet to be completed. As soon as the land is acquired, the SPVs will be set up," a power ministry official said. |
While the power ministry is acting as a facilitator for the whole arrangement, the shell companies are working independently to reach a stage where major tie-ups, statutory clearances and linkages are in place. |
The shell companies will be transferred to the successful bidders for execution of the projects. "With a number of concerns addressed by the shell company, the risk factors stand minimised," the company official added. |
The SPVs have been given charge of preparing the project report, land acquisition, allocation of fuel linkages, coal blocks and water. |
Other activities include securing approvals and statutory clearances, taking care of offtake and sale of power, appointment of consultants for international competitive bidding, document preparation and evaluation and preparing project reports, among others. |