The Cabinet Committee on Economic Affairs (CCEA), on Thursday, relaxed the criteria for power generation projects to qualify as mega power projects. This will qualify 15 additional projects for the benefits under the mega power project policy.
“To avail of the benefits under the (Mega Power) policy, the developer must tie up at least 65 per cent of the installed capacity through competitive bidding,’’ Finance Minister P. Chidambaram told reporters after announcing that the CCEA had cleared the Power Ministry’s proposal of changes to the Mega Power Policy. “The balance 35 per cent of the installed capacity should be through the regulated tariff according to the host State’s policy.”
The Mega Power Policy allows thermal power projects of 1,000 MW and above capacity and hydro power projects of 500 MW and above to import equipment duty-free. To avail of these benefits, project developers must submit provisional the mega power project status certificate along with a fixed deposit receipt from any scheduled bank as a security for a term of 36 months.
The CCEA also relaxed this time period. “The maximum time period has been extended to 60 months instead of current provision of 36 months from the date of import of provisional mega projects for furnishing final mega certificates to the tax authorities,” Mr. Chidambaram said.
The Mega Power Policy was introduced in November, 1995, to incentivise large power projects.
The CCEA, also approved construction of a 220 kV transmission system from Alusteng in the Srinagar valley to Leh and inter- connection system for Drass, Kargil, Khalsti and Leh sub-stations in J&K at a cost of Rs.1,788.41 crore.
The project would be implemented through Power Grid Corp within 42 months from the date of release of the first instalment of funds, Mr. Chidambaram said.
The project cost would be borne by the Central Government and the J&K Government in the ratio of 95:5, he added.
On commissioning, the transmission system will be transferred to the government of J&K, which will carry out operation and maintenance (O&M) and other related activities at their own cost as per the terms and conditions in the memorandum of understanding to be signed in this regard.