Private power projects to get delayed by two years

As Maharashtra Electricity Regulatory Commission's (MERC) decision to partially allow the Maharashtra State Electricity Distribution Company Limited's (MSEDCL) application to invite the competitive bids for power purchase, has given much needed boost for completion of private power projects in the state. But still the projects will be delayed by two years.

The power regulator partially allowing MSEDCL's application given the discom clearance to invite the bids for 2,000 MW and asked to submit details regarding future demand projections and availability of power from its sister concern Mahagenco.

In 2005 and 2006 state government signed MoUs with many private players for generation of nearly 10,000 MW of electricity.

This includes Reliance Energy Limited, Tatas, Jindals, Essar and Ispat Industries. One important condition in the MoU was that, all these companies have to complete their financial closure within one year of signing the MoU.

However, nothing moved since then was the perception as no activity was seen on the ground.

Speaking to Business Standard a senior official from power ministry said, "one important reason for things not moving fast was that, "we were waiting clearance from MERC to go ahead and invite bids from these private power generation companies as unless these companies have Power Purchase Agreement (PPA) with some discom it is not possible for them to arrange finances for the project. Now MERC's order have started ball in rolling".

He further said, "Jindal for their 1,000 MW project at Jaigad in Ratnagiri district have identified the land and the acquisition proceedings have also started, besides this they have got environmental clearance from state pollution control board, now they are awaiting the Central clearance".

Tatas for their 1,500 MW projet at Shahpur, Essar for the 1,000 MW project at Vale-Bagal have also secured environmental clearance from state pollution control board and now awaiting central clearance. And in the case of both the projects land acquisition proceedings have started.

In the case of Ispat, Ispat has two projects of 1,000 MW each at Bhadravati in Chandrapur district and Dolvi in Raigadh district.

For their Bhadrapur project land and all necessary permissions are in place and Ispat is trying for coal linkages, in the case of their Dolvi project, issue of CRZ regulation needs to be addressed and we are confident it can be sorted out, he added.

In the case of Reliance who wants to put up 4,000 MW plant at Shahpur, Reliance have also started land acquisition process privately and they also have got environmental permission from state, he said.

However, the only MoU on which no progress has been made and it doesn?t seem project is likely to take-off is of GMR, official said.

But he accepted that, all these projects will take another at least four years to complete and the original deadline will be missed by almost two years.