Maithon Power Unit Gets Mega Project Status

The Union government has decided to accord mega power project status to the 1,000 mw Maithon Right Bank project. The project is being set up by the BSES-Damodar Valley Corporation (DVC) combine in the Bengal-Bihar border.

Disclosing this, BSES chairman and managing director R V Shahi said that a communication had been received from the Union government to this effect.

Both BSES and DVC will hold 45 per cent each in the venture with the balance 10 per cent being held by financial institutions.

The mega power project status enables the project to get a number of concessions. The project will enjoy a tax holiday of 10 years against 5 years enjoyed by infrastructure projects. In case the state electricity boards default on mega project's dues, it will be subtracted from the central plan allocation to the states. The project developers can enter into commercial agreements with Power Trading Corporation (PTC) which will buy and sell power. The project can have access to the inter-state grid being operated by PowerGrid Corporation.

Sources say that since the project is being backed by deduction of dues of the states from central plan allocations, it virtually amounts to a counter guarantee. The Maithon project was expected to bag the mega power project status as it satisfies the definition of such a project on all counts.

The Union government had announced a mega power project policy earlier this year. Under this policy, projects of 1000 MW and above will be accorded mega project status if they sell power across states. PTC which is being set up as a joint venture between National Thermal Power Corporation, National Hydro Power Corporation and Nuclear Power Corporation will buy power from a power surplus state and sell it to power deficit states. Even private parties are expected to pick up a stake in PTC.

Earlier this year, the Union ministry of power had given a conditional clearance to the Maithon power project.