New mega power policy on the cards

Reasoning the need for the re-appraisal, finance ministry sources said the benefit of the power policy has so far been availed by the National Thermal Power Corporation NTPC and the National Hydro-electric Power Corporation NHPC.

According to power ministry sources, 8216;8216;Many state governments have been requesting that the benefits of zero duty and deemed export be extended to small-sized thermal projects as well, which are normally taken up for implementation in the state and private sectors due to resource and load constraints.

8216;8216;Lowering the threshold to an appropriate level for availing benefits as contemplated under the mega power policy, is necessary,8217;8217; they added.

The government liberalised the mega power policy last year by extending the benefits of nil customs duty on project imports coupled with a refund of terminal excise duty to the domestic manufacturer to all thermal projects of 1,000 MW and more and hydro-electric projects of 500 MW and above.

The changes proposed by the power ministry in the existing policy will give a boost to hydel power development, along with many private and state power projects in the country.

The nodal ministry feels that the modifications suggested in the mega power policy will help in creating a cost-competitive environment and facilitate dispersed generation in the state, central as well as in the private sector.

Normally, states implement thermal projects with a 250 MW capacity and above.

8216;8216;Therefore, it would be appropriate to reduce the threshold for duty concession to 250 MW for thermal plants, which will allow a level playing field in the thermal sector.

8220;For hydro-electric plants, the ministry has proposed to do away with the capacity threshold completely as there are very large number of small hydro-electric projects mostly in geographically disadvantaged and backward areas of the country,8221; 8217;the nodal ministry said.