Power Finance Corporation (PFC), the nodal agency for ultra mega power projects (UMPP), has extended the deadline for submitting initial request for participation in bidding for the Chhattisgarh project by two months, delaying the project further. This is the second extension of the deadline for submitting request for qualification (RFQ) document after the bidding process was started early this year. The last date for submission of RFQ bids for the project was May 3, which was extended to July 5 on the request of the power ministry. The extension comes as the government is yet to clarify the status of captive coal block bundled with the 4000 mw Chhattisgarh UMPP.
Pindarakhi and Puta Parogia coal blocks that were allocated to the project by the coal ministry in 2009 fall in densely forested Hasdeo Arand coal belt. This belt has been declared a “no go” area for mining by environment and coal ministries. “As directed by the prime ministers Office (PMO), we are in the process of finalising some strategy for coal blocks for Chhattisgarh UMPP in consultation with the coal ministry,” said an official of the power ministry. The power ministry has also written to the environment ministry to clear the doubt over this coal blocks that was allocated after following all procedures. Ironically, the biding for the Chhattisgarh project has been postponed despite it generating good enquiries from prospective investors. In contrast, bidding for Tilaiya UMPP was extended three times due to poor response from companies.
“In all 12 domestic companies and about two to three international consortiums have showed interest in participating in the bids for Chhattisgarh UMPP,” said the official. These include L&T, NTPC, Tata Power, Sterlite Industries, Jindal Steel & Power, Essar Power, GVK Power & Infrastructure, AES Power, Lanco Infratech, Dian Wijaya (Malaysia), Torrent Power and Citra.
The environment ministry has divided coal-bearing areas in the country into three broad categories — those which do not pose serious environmental risks, “no-go” but which could be allowed after remedial measures like compensation forestry, and the third category that is completely no-go for mining. “The Hasdeo area is one such no-go area where no mining activities will be allowed,” Environment Minister Jairam Ramesh had told earlier.
A power ministry official said: “The stance of the environment ministry could create doubts in the mind of investors that could impact bids. We want to get clarification on this before and formulate a strategy before RFQ process is completed.” “We are also writing to the coal and environment ministries to see that the power sector project is not stalled,” the official said.
India’s attempt to step up power capacity sharply has been plagued by delays. In the Eleventh Plan the capacity addition will fall short of 78000 MW planned. The UMPPs were envisaged as a quick fix to the problem. So far, the government has bid out four UMPP at Mundra, Sasan, Tilaiya and Krishnapatnam.Each UMPP requires an investment of close to Rs 20,000 crore and its commissioning is considered crucial for achieving the ambitious targets of generation capacity addition.
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