The Union power ministry plans to create 21 shell companies through the National Thermal Power Corporation (NTPC) to acquire all the clearances needed for setting up mega power projects. The clearances will subsequently be transferred to the actual power producer, once they are identified.
According to the proposed policy, the clearance given to the shell company will be transferred to the special purpose vehicle created for the project. This will straightaway knock off three to four years normally needed for getting these clearance, Union power minister P Rangarajan Kumaramangalam said here yesterday. Around 21 mega power projects, varying in size from 2,000 mw to 10,000 mw, are on the anvil, he said.
The government plans to introduce a series of bills in Parliament on transmission, distribution, energy-conservative securitisation, and the standardisation of fuel supply and power purchase agreements, Kumaramangalam added. A policy on liquid fuel-based projects is also on the anvil.
The power ministry has held talks with major industry associations on levying a conservation cess on energy-inefficient units. According to Kumaramangalam, for every mw of power lost, Rs 4 crore is lost on a recurring basis. He announced the formation of working groups for a 2,000-mw lignite plant at Neyvelli. The project will be put up jointly by Neyvelli Lignite Corp and NTPC during the 10th five-year plan.
Kumaramangalam said a mischievous interpretation of the Power Ordinance was the cause of the recent controversy in Tamil Nadu. State governments were free to provide subsidy for any class of consumers, provided there was equivalent budgetary support, he said, adding that this was in the interest of the power suppliers and, ultimately, the state.
For states notifying the setting up of a State Electricity Regulatory Commission, the minister announced several sops: a 1 per cent additional subsidy on loans from the Power Finance Corporation, a 4 per cent concession on loans taken from the Rural Electrification Corporation, and a waiver of the mandatory 3 per cent return on fixed assets.
These significant concessions would help to improve investor perception of the sector, Kumaramangalam said.
He felt the impact of US sanctions on power projects would be negligible because only 23 per cent of the countrys power budget is met from external funds, both bilateral and multilateral. The minister, however, conceded that interest rates would harden for money raised abroad.
Kumaramangalam said counter-guarantees would be given only for foreign-debt component of projects and would be issued selectively. But when offered, it would be used as a bargaining tool to get the cost reduced, he said. Following the formation of the Central Electricity Regulatory Comm ission, only the core of the CEA would be retained. All other functions, specially those involved in fixing tariffs, would become part of the commission, he added.
