Ultra mega projects may get a power-cut

No special sops, says Planning Commission.

If the Planning Commission has its way, the power ministry's plans for "ultra mega" power plants may hit a roadblock.

The plan panel has said no special sops need to be given to such projects (4,000 MW and above). Instead, it feels, these projects should be extended the same sops as are available to mega power projects (1000 MW and above).

"If someone takes a large risk, it does not mean they should be offered tax concessions. We do not believe that ultra mega power plants need be given any special consideration or concessions like coal linkages. There shall be a uniform policy irrespective of the size of plants," a top Planning Commission official told Business Standard.

Under the Union power ministry's ultra mega power project policy, five mega power projects are to be set up in Maharashtra, Gujarat, Karnataka, Chhattisgarh and Madhya Pradesh.

The power projects will be developed through a competitive tariff based bidding process, involving private sector participation. The projects, all coal based, will be set up at coal pit-heads and along the coastline to facilitate imports.

Mega power projects enjoy customs duty waiver on the equipment that they import. Private power project developers had demanded concessions like tax benefits, higher debt-equity ratio and the option to choose technology and unit size for being a part of the ultra mega power projects.

The apex plan panel is of the opinion that ultra mega power projects shall leverage their huge economies of scale to be profitable and in turn not seek any special benefits.

This is part of the recommendation that the Plan panel wants included in the ultra mega power project policy of the Union government.

The power ministry believes the projects would help the country reach the targeted 650,000 MW of installed capacity by the 14th Plan (2026-27).