Incentives Package For Power Projects In Maharashtra

The Maharashtra govenment yesterday unveiled a package of incentives for the seven independent power projects (IPPs), tenders for which had been floated by the Maharashtra State Electricity Board (MSEB).

The incentives given by the government include concessional sales tax, and tax exemption on sale of electrticity. On the concluding day of the two-day high-profile global investors conference styled Advantage Maharashtra on Tuesday, state energy secretary, Asoke Basak said tariff was the main criterion for awarding the projects.

He made it clear that while the draft power purchase agreement (PPA) was negotiable at a pre-bid conference, tariff was not. The tariff will be computed using a formula based on fixed and variable costs. The fixed component will not be allowed to be raised for the entire 15-year duration of the PPA. The variable component, the fuel charge, will be based on the heat rate.

 

The bidders, would, however have the freedom to choose the technology and fuel barring coal and high speed diesel (HSD). Land and water will be made available by Maharashtra Industrial Development Corporation (MIDC). Bidders could participate in multiple projects which would have to be completed between 21 to 27 months of signing the PPA. MSEB would also guarantee the offtake if the plant load factor (PLF) was 80 per cent.

Payment will be guaranteed through a letter of credit and the Maharashtra government will guarantee termination payments.

Basak made it clear in reply to a question that fuel linkage would have to be sanctioned by the department of petroleum and natural gas and the petroleum ministry.

MSEB had floated the global tender for the seven IPPs in January. The projects on offer are at Waluj near Aurangabad, Sinnar in Nasik district, Kagal in Kolhapur district, Mahad in Raigad district, Ranjangaon in Pune district, Chincholi near Solapur and Wai near Satara. The projects range between 100 to 180 mw.

Basak also told the conference that the Union government has prepared the draft of a notification which will delegate powers to the state governments for issuing environmental clearances to power projects. I have received this information today, he said, noting that the step is yet another move by the centre to delegate more power to the states in finalising power projects.