NEW DELHI, April 28: The Union government has issued show-cause notices to power companies which had failed to achieve financial closure by March 31, 1998, irrespective of whether they had tied up for liquid fuel supply or not, Union power Minister P R Kumaramangalam said here today.The companies have been asked to explain their failure to meet the deadline. They have also been told to specify the time they need to make financial closure and the reason for seeking an extension, the Power Minister said in reply to a question at CII's national conference and annual session.The government would give these companies a hearing to determine whether they merit an extension, Kumaramangalam said.Kumaramangalam stated that the Government would float tenders for 15 mw power projects involving generation of 17,000 MW of power during the course of the year.He explained that such action was necessary as many power companies which had sought all approval existed only on paper. He felt such companies were takingadvantages of the inefficiencies in the Government for commercial reasons. "These projects are not tradeable," Kumaramangalam said in reference to the companies which existed on paper.The minister clarified that only those units which had reached advanced stages of executing their projects will be given extension for their projects. The other projects, the minister indicated, could be scrapped.Kumaramangalam said that the 15 new projects for which tenders would be floated this year would be based in pit heads or coastal areas where fuel could be easily transported or delivered through pipelines.He added that a standing independent group, headed by Justice P N Bhagwati, was working into the technical and financial details of the request for qualification of the projects to be promoted through competitive bidding route.Under this process, power companies will be allowed to set up a shell company to get all the pre-operative clearances such as environment clearance, site clearance, clearance for thepit head as well as technical parameter clearances.The minister further reiterated that he would try to change three mega power projects from the memorandum of understanding to competitive route. Kumaramangalam has stated that his Government has decided to discourage the MoU route for power projects.Kumaramangalam stated that his Government was also keen to bring down the cost of securitisation of documents from the present level of 13 per cent.
