Gas re-distribution proposals for three ultra-mega power projects are important for the whole country and the ministers must find a solution during the meeting of EGoM in the first week of August

In the first week of August, Defence Minister AK Antony is expected to head the meeting of the Empowered Group of Ministers (EGoM). This EGoM meeting will decide not only the revised and improved norms for three  ultra-mega power projects (UMPPs), but also consider ways and means to ensure gas supplies to existing power plants, as a sequel to continuing drop in production from wells of Reliance Industries Ltd (RIL).

It is learnt that in an earlier meeting the EGoM had vetoed the idea of diverting gas supplies from fertilizer plants (who are already in short supply) to power generators, because such a move would immediately affect agriculture.

It may be remembered that 25 power plants were assured of supplies of 29.74 mmscmd of gas per day, but the steep fall in production from Reliance has left them with nothing at all.

Now the EGoM will try to work out ways and means to obtain gas from other sources.

Take the example of GSPC (Gujarat State Petroleum Corporation), which found gas in 2005 and is still waiting for clearance to lay a 10 km pipe line. Their Deen Dayal well can pump out upto 5 mmmsmd per day (if not more), but when it is fully operational.  The trouble is that they do not have clearance for a 10 km pipe line.  Will the EGoM look up this case, when they meet on in the first week of August?

The three UMMPs are located at Bedambahal in Odisha, Cheyyur in Tamil Nadu and Surguja in Chhattisgarh, and these are expected to produce 4000MW in all, when commissioned. A shot in the dark would put this to be in three-four years from now!

Based on past experience, many changes have been incorporated in the new bidding documents, details are not fully made public yet. However, unlike the past, it appears, where the bidder had to give various quotes spread over 25 years basis the parameters applicable-capacity charge and heat. Now, under the new process, there would not be any quote for fuel charges and the capacity charge will be linked to depreciation, loan repayment and inflation.

Such projects will either have a captive mine attached to them or a suitable linkage provided from domestic mines.

Land ownership will remain with the State.  The project developer will plan, design, build, finance, operate and transfer the structure, when it is fully functional.  In effect, he will be a contractor from conception to completion.

In a further relaxation, the power producer will be allowed to sell electricity in the market which may be expensive if based on imported coal.

Such proposals are very pleasing to hear and present an optimistic picture of things to come, if all goes well.  As far as these plants are concerned, it is imperative that EGoM comes up clearly with the following:

a) Provide captive mines that are operational or ready to start once handed over

b) Relative State clearances are available or pre-approved

c) There are no land acquisition hassles to be faced by project promoter

d) There are no obstacles from MOEF and that again, clearances are available

e) If any of the above area not readily available, then firm commitments are made to provide them within the specified time frame to the project promoter

f) Railway siding or dedicated corridor are predetermined and that Railways guarantee that they would be in situ within the specified time frame

g) If allotted coal mines are virgin, the miner will have immediate or within a reasonable time frame, permission to tap coal bed methane (if found in commercially viable quantity), which is currently being wasted/ lost

h) That the government has no objection, or in fact, welcomes foreign collaboration to participate in bringing technology/equipments to mine the coal

i) The public would like to know who are the invitees and actual attendees for this EGoM?  Are the MoEF and State clearance authorities actively associated with such group meetings, and can they give firm commitments and perform?

j) Finally, the government must set a specific time table to achieve the goals and have the 3 plants in operation.

Simply announcing the project and allocating captive mines etc have got us nowhere in the past.  It is time to take projects in hand and perform.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)