Odisha extends MoUs of five power producers

Does away with contentious 'free power' clause

The Odisha government has entered into fresh memorandum of understanding (MoU) with five independent power producers (IPPs) to extend the validity of their lapsed pacts.

New MoUs were signed after the law department opined that lapsed MoUs cannot be renewed retrospectively. The IPPs who signed fresh agreements with the government are Ind-Barath Energy (Utkal) Ltd, NSL Nagapatnam & Infratech Pvt Ltd, Maa Durga Thermal Power Company Ltd, Visaka Thermal Power Ltd and Monnet Power Company Ltd. Their MoUs have been extended keeping in view the strides made in implementation of their coal-fired power plants. The new MoUs are valid for a period of two years from the date of agreement. There have been no major changes in the new MoUs except that the state government will no longer recommend coal blocks in favour of the companies. Also, the free power clause has been done away with. As earlier, the IPPs will contribute 12-14 per cent of power to the state grid at variable cost,” said a senior official of one of the power companies. According to the fresh MoUs, the IPPs cannot dilute their stake holding to below 51 per cent for at least three years from the date of commencement of their operations. Also, any stake sale beyond this lock-in period will need prior permission of the state government.

The IPPs have to comply with the mandatory clause to promote employment among locals. The clause stipulates that industries setting up their projects in the state have to reserve 90 per cent jobs for locals in the unskilled and semi-skilled category, up to 60 per cent in skilled category and 30 per cent in the supervisory and managerial cadre while giving them the option to fill up the post of senior executives from the open market. The IPPs also have to take steps to develop ancillary and downstream units around the mother plant. So far, two IPPs — Sterlite Energy and GMR Kamalanga Energy have commissioned their units. While Sterlite Energy has fully operationalised its 2,400 Mw coal-based plant at Burkhamunda near Jharsuguda, GMR has put on stream two 350 Mw units of its plant at Kamalanga in Dhenkanal district.