Country’s largest power producer NTPC plans to invite tenders to source power generation equipment for all its upcoming gas-based power projects in a bid to maintain readiness for these projects and exert pressure on the government to give it advance linkage of gas. Allocation of gas is important for NTPC to begin work on its several stranded power plants.
The state-owned power major is at a big disadvantage to its private sector counterparts to gas linkage in a deficit market. While private sector power projects enjoy the flexibility of ordering equipment and begin initial construction work on projects even before securing fuel linkage, a department of public enterprise (DPE) guidelines bars PSUs such as NTPC from undertaking these before securing fuel linkage for the projects.
The disadvantage means that NTPC may lose out on allocation once government starts releasing gas for new power projects. Private projects are making steady progress on their gas-based projects despite final word on gas linkage while NTPC is hoping that government provides it in-principle allocation in advance so that it could start any work on projects.
An empowered group of ministers (EGoM) has so far provided gas linkage on to stranded power projects and those which had been commissioned in fiscal 2009-10. Once the availability of gas from Reliance Industries K-G D6 block improves and ONGC also makes its new gas blocks operational, the EGoM is expected to alloocate gas even for new power projects.
Here the priority is expected to be projects that have made substantial progress in terms of construction of power plants and ordering of equipment.
“NTPC could lose out to its private sector counterparts 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 an official of the power ministry privy to the development.
As per the plan, which is still being discussed internally in NTPC, the power major may issue notice inviting tender (NIT) for sourcing equipment for all its upcoming gas-based projects. While bids would be evaluated, orders will not be placed till the company gets assurance on gas allocation.
The NIT is being considered sufficient to prove readiness of NTPC projects to receive gas. This will eliminate the perceived disadvantage and bring NTPC on same level of private projects for priority allocation of fuel.
The power ministry official said NTPC could consider inviting tender for a total of about 10,000 mw of capacity including 2,600 mw worth expansion projects at Kawas and Gandhar that is in dispute between NTPC and Reliance Industries in Bombay High Court. 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.
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