Ministry mulls rationalisation of power project capacity

Kolkata: The Union Power Ministry is considering rationalisation of the capacity benchmark for ‘mega’ power projects for both the thermal and hydroelectric segment. Also being considered are offering fiscal incentives, including concessions on customs and excise duties.

Currently, the capacity benchmark for mega thermal and hydro-electric projects are 1,000 MW and 500 MW respectively.

Talking to newspersons on the sidelines of the “Electricity East 2008” conference organised by the Indian Chamber of Commerce here on Friday, the Union Power Minister, Mr Sushil Kumar Shinde, said that his Ministry was considering a host of proposals for making investments in mega power projects more attractive.

While offering higher fiscal incentives are high on the agenda, the Ministry is also considering lowering the capacity benchmark for mega projects in both thermal and hydel segments in the investment-starved North-Eastern states.

Equipment supply;

Mr Shinde reiterated his concern over constraints in supply of power equipment, especially in view of the Government’s move to add huge generation capacities during the Eleventh and Twelfth Plan.

“Can one company (BHEL) be sufficient to provide machinery for future capacity addition programmes,” the minister said, taking a cue from West Bengal power minister Mr Mrinal Bannerje’s allegation about delays in implementation of thermal projects due to delay in supply of equipment by BHEL.

Meanwhile, the uncertainties continue over the proposed IPO of Rural Electrification Corporation Ltd (REC). The IPO is slated to open on February 19. “We are watching the market situation,” Mr Shinde told newspersons here on Friday when asked whether the IPO would be withdrawn.

REC, however, continues its IPO road shows in India and abroad.

The company has fixed the price band at Rs 90-105 per share of Rs 10 each. The issue is expected to mop up Rs 1,400-1,600 crore.