Now, you can expect build-operate-transfer (BOT) model in coal-based power generation projects. Maharashtra, which strives to become load-shedding free by end of 2012, has initiated a move to hand over to private operator some of the projects of Maharashtra State Power Generation Company (MahaGenco) functioning at below 60% plant load factor (PLF).
Incidentally, 20 interested parties including Tata Power, Jindal, Sterlite, BGR have so far submitted expressions of interest to MahaGenco to undertake the operations of three units with total generation capacity of 610 MW at Koradi near Nagpur and two units of 210 MW at Bhusawal in north Maharashtra.
MahaGenco official told Business Standard "We will examine the EoIs received by us in due course of time. The idea is to improve the functioning of these units especially increase in PLF. However, various models are being currently looked at wherein the operator will share profit with MahaGenco or pay some premium annually.
The power purchase agreement with the state-run MahaVitaran will remain the same." The official said MahaGenco has yet to take a decision on the time period for handing over the project to private operator. "After holding discussions with 20 parties who have submitted EoIs, MahaGenco will later issue request for proposal."
Currently, MahaGenoc has an installed capacity of 10,991 MW comprising 7,795 MW of coal, 2,344 MW of hydro and 852 MW of gas.
Recently, MahaGenco has commissioned 500 MW at Kharparkheda while two units of 500 MW each at Bhusawal would be commissioned soon. Besides, Mahagenco has proposed a capacity addition of 9,250 MW during 12th plan. The company proposes to increase the installed capacity to 28,407 by the end of 2018-19. According to the official, the plant load factor of MahaGenco's plants range between 70% and 80%.
State energy minister Ajit Pawar, during his reply to debate on energy department's proposal in annual budget for 2012-13, said BOT model would help increase efficiency of MahaGenco's plants. during his reply to debate on energy department's proposal in annual budget for 2012-13.
RV Shahi, former power secretary, said "Maharashtra indeed has come out with path breaking initiatives in the past. They did Pune model on distribution, Bhiwandi model on franchisee. There is good exposure of private sector in generation and distribution in the state. This will be yet another path breaking initiative in which such power plants which are not performing well could be handed over to private sector to invest, renovate and modernise and accordingly share the benefits of efficiency with the government company. This would be in the larger interest of consumers and therefore it has the potential of being replicated in different parts of the country."
Ashwini Chitnis, senior research associate, Prayas (Pune based NGO) observed " Conceptually the idea is similar distribution franchisee whereby the licensee does not see possibility of making improvement in business as usual. In the proposed move, MahaGenco plans to engage a different party which will ensure performance of better expected level. This is being tried by Maharashtra for the first time in generation. However, the successful bidder, who takes over the operations of the plant, will have to share the performance gains with MahaGenco. How the gain sharing will be done is the crux of the whole arrangement. Also, I have not studied the model and therefore I have no further comment to make."