An ultra mega lie

Failure of a private sector company to implement the Ultra Mega Power Plants (UMPP) is hampering country's efforts to attain self - sufficiency in power
Noor Mohammad Hardnews  

When the Union power ministry launched ultra mega power project (UMPP) scheme in 2006, it was billed as the answer to India's chronic power shortages. It was argued by the ministry that by implementing these large-sized projects, the country should be able to expedite the pace of addition of its power generation capacity. Since these projects were to be allocated through tariff-based bidding, it was also hoped that the scheme would help bring down average electricity in the country.  But now the hopes are floundering given the slow progress in implementation of these projects. 

Anil Ambani-led Reliance Power has bagged a lion's share of these projects by putting in aggressive bids. It  has bagged three UMPPs  at Sasan, Krishnapatnam and Tilaiya. 

Industry experts told Hardnews that it is the lure of captive coal blocks that has attracted such aggressive bidding from private players.  With Reliance Power unable to start implementation work on any of the projects, the UMPP scheme has become a joke. 

On paper, these projects are facing serious difficulties in acquiring land and securing various statutory approvals largely from ministry of environment. But the truth is not so simple.

Reliance Power secured a Letter of Intent (LoI) for the allocated Tilaiya UMPP in Jharkhand, in February 2009, but it has not yet taken over the special purpose vehicle (SPV) floated for implementing the project. Hardnews learns that Reliance Power has made it clear to the ministry of power that it will not take charge of the SPV till primary-level clearances are arranged by Power Finance Corp, the government's nodal agency for supervising preparations for bidding of these projects. Quite clearly, the private sector company wants the government to carry bulk of the burden for them before they do anything.  

Meanwhile, in a recent review meeting, newly-appointed Power Secretary, Harishankar Brahma, expressed serious concern over the continued delay in the acquisition of land for the Sasan UMPP in Madhya Pradesh. He directed the Central Electricity Authority (CEA) to step up monitoring of the project so that land acquisition could be expedited. Land acquisition has also proved tricky for the Krishnapatnam UMPP in Andhra Pradesh.  

The power shortfall in the country has risen sharply in the recent decade as the capacity addition has failed to keep pace with the growth in power requirement. This has given rise to the widespread fear that India might well fall off the high economic growth trajectory if the issue of power shortfall is not addressed in time.

The UMPP scheme had rekindled hope of a turnaround in the power sector scenario after the industry's dismal failure to meet capacity addition target during the 10^th Plan. But now it turns out that it was a false dawn.