Five new ultra mega power projects, target Rs 1 lakh cr

To be auctioned in plug-and-play mode; clean energy cess on coal to be hiked.

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Under the “plug-and-play” mode, coal linkages and indicative green clearances are expected to be ensured to simplify mining and faster execution.

In his Budget proposals, Finance Minister Arun Jaitley announced plans to auction five new ultra mega power projects (UMPPs) in the plug-and-play mode to ensure their smooth execution and help “unlock” investments to the tune of Rs 1 lakh crore.

He said five UMPPs, each of 4,000 MW, would be auctioned in the given mode to minimise the need for investors to secure multiple approvals. “All clearances and linkages will be in place before the project is awarded by a transparent auction system. This should unlock investments to the extent of Rs 1 lakh crore,” he said.

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Under the “plug-and-play” mode, coal linkages and indicative green clearances are expected to be ensured to simplify mining and faster execution. “The government would also consider similar plug-and-play projects in other infrastructure projects such as roads, ports, rail lines, airports etc,” said Jaitley.

He said the second unit of Kudankulam Nuclear Power Station would be commissioned in the next fiscal. So far, four UMPPs have been awarded, of which Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) have been bagged by Reliance Power, while Tata Power is operating the Mundra UMPP in Gujarat.

The proposal to set up the mega plants follows cancellation of the bids for UMPPs earlier proposed at Bedabahal (Orissa) and Cheyyur (Tamil Nadu) due to tepid response from the private sector and lack of enthusiasm from the bankers. The power ministry has constituted an expert committee to examine the efficacy of the methodology adopted for these mega plants. The bidding process for these two plants is likely to be initiated this year.

“The capex of the public sector units is expected to be Rs 3,17,889 crore, an increase of approximately Rs 80,844 crore over revised estimates of 2014-15. In fact, all told, investment in infrastructure will go up by Rs 70,000 crore in 2015-16, over the year 2014-15 from the Centre’s funds and resources of central public sector enterprises,” he said.

Jaitley also proposed to increase the clean energy cess on coal from Rs 100 to Rs 200 per metric tonne of coal, to finance cleaning the Ganga and other environment initiatives. The coal firms are expected to realise the increased cess from their customers, which could hit thermal power prices.