NTPC proposes to invite tenders for power generation equipment for all its upcoming gas-based projects having a capacity of 10,000 mw

State-run power generator NTPC proposes to invite tenders for power generation equipment for all its upcoming gas-based projects that will have a capacity of 10,000 mw, without waiting for assured supply of fuel, to put pressure on the government to allocate natural gas for its stranded plants. 

The department of public enterprise (DPE) forbids state firms, such as NTPC, from ordering equipment and starting construction before securing fuel for the projects. This has put the power major at a disadvantage via-a-vis private sector firms that place orders and start work on plants even before securing any gas linkage. NTPC would place orders as soon as the government allocates gas. 

“NTPC will be a major loser once government starts releasing gas for new projects based on the level of investments put in by companies and extent of work done on projects,” said a senior NTPC official involved in finalising of new strategy. 

“The notice inviting tender (NIT) for sourcing equipment will prove readiness of NTPC to receive gas and thereby help it to counter procedural disadvantages that put private projects ahead in the priority order for fuel linkage,” the official added. 

According to the plan, the power PSU will invite tender for about 10,000 mw of capacity, including 2,600 mw worth expansion projects at Kawas and Gandhar, which are in dispute with Reliance Industries in the Bombay High Court. 

While bids would be evaluated, orders will not be placed till the company gets assurance on gas allocation . Out of the 10,000 mw, about 7,500 mw of projects are new and expansion projects proposed by NTPC for completion during the 12th plan period (2012-17 ). Once the government starts the process of allocation of gas from either RIL’s KG D-6 block or other discoveries of ONGC, the prior tendering process will help NTPC to not only get priority but also help it to commission projects in a short span of time. 

For its 12th Plan projects that are stranded due to want of gas, NTPC proposes to prepare fresh detailed project reports and get mandatory statutory clearances afresh in cases where such clearances are lapsing. The NIT process will be initiated immediately after completing this process. 

NTPC does figure in the new list of projects finalised by the power ministry for allocation of KG D-6 gas. In its submissions to the empowered group of ministers (EGoM), the ministry has put projects of Lanco, GMR, GSPC, Reliance Power , Torrent, Uttarakhand’s Kashipur project for allocation of gas owing to their preparedness to complete the projects before the end of current Plan. 

NTPC projects that will need quick allocation of gas include, its expansion projects of 1,000 mw each at Badarpur, Auraiya, Faridabad and Dadri. Besides, the PSU has also proposed 2,000 mw expansion project of Ratnagiri Gas and Power (RGPPL). In addition , NTPC’s gas-based capacity at Dadri could be further expanded if gas is available. NTPC has indicated initial gas requirement of 30 mmscmd for all the proposed new projects. 

“NTPC is better place to execute new gas-based projects as most of it would be coming in areas close to their running power plants. Release of gas linkage could really put these projects on fast track unlike several other private sector projects,” said an analyst dealing with the power sector. 

Government has projected that gas availability will increase from present 142 mmscmd to 152 mmscmd by 2011-12 and further to 186 mmscmd. This is expected to release large quantities of gas for the power sector, and the change in tedering process would put NTPC projects to an advantage.