The Union power minister P R Kuramangalam yesterday announced that the tenders for the four gas projects of National Thermal Power Corporation (NTPC) Anta, Auriya, Kawas and Gandhar, would not be issued until the government decides on the purchase price preference (PPP) policy.
Speaking to reporters at a press conference, the minister also said that under the new milestone linked financing strategy of power projects the financial institutions would finance projects on the basis of least tariff.
Kumaramangalam also said that the power ministry would hold a meeting on May 31 to discuss the report submitted by the two financial institutions SBI Caps and ICICI on restructuring of the central public sector undertakings.
On the extension of the PPP after it lapsed on the March 31, the power minister expressed matter is pending before the finance ministry and would most likely be referred to the Cabinet.
He explained that because of the lopsided nature of providing 10 per cent price preference under the present policy there was a need to further modify the PPP policy which would remove the undue advantages arising towards the domestic companies.
After the PPP lapsed NTPC has already put the tenders for Ramagundam and Rihand on hold.
On the new mode adopted of financing by the financial institutions the minister said that a committee had been set up by the financial institutions under which private power projects would be financed based on the reforms taken up by the respective state governments.
This committee would lay down the net revenue that would increase at each reform milestone achieved by each state. The first milestone would start from metering to compulsory metering till the states take up privatisation, the minister said.
In order to facilitate further investment flow into the sector, the power ministry had also sought the Cabinet's approval to lift the investment ceiling of Rs 1,500 crore in the power sector and thereby put it on the automatic route. At present, equity investments up to Rs 1,500 crore in a project requiring investments up to Rs 5,000 crore do not require FIPB approval.
The minister however sounded a caution notice to IPPs and stated that the government would cancel the clearances for private power projects which failed to tie up finances by June 30.
