Reliance Power's Jharkhand UMPP proposal gets CCI nod…

 

Cabinet Committee on Investment has cleared Reliance Power's Tilaiya ultra mega power project in Jharkhand, sources said.

RPower, according to them, may not have to provide non-forest land to compensate for the loss of forest land acquired for the proposed plant.

Sources said the company's 4,000 MW Tilaiya plant is now expected to be treated on a par with the other public sector projects and therefore would be exempted from providing compensatory afforestation for the loss of forest land.

At present, only central government or public sector undertakings have exemption from the obligation to provide non-forest land.

Tilaiya power plant is to be executed by a Special Purpose Vehicle (SPV), Jharkhand Integrated Power Ltd, which was handed over to Reliance Power in January 2009 by Power Finance Corporation -- the nodal agency for UMPPs.

Tilaiya would be the fourth UMPP to be awarded to a developer. Earlier, two UMPPs bagged by Reliance Power are those of Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh). Tata Power is operating the Mundra UMPP in Gujarat.

UMPP is a big-size coal-based power plant with at least 4,000 MW capacity and is built at an approximate cost of Rs 25,000 crore.

CCI, headed by Prime Minister Manmohan Singh, aims to fast-track major projects and help boost investor sentiment.

Source

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RPower approaches CERC seeking increase in tariff for all of its UMPPs...

 

Reliance Power Limited  (R-Power) has approached the Central Electricity Regulatory Commission (CERC) to revise the tariff of all of its 3 Ultra Mega Power Projects in the country.

Tilaiya UMPP

According to the company, the cost of Rehabilitation & Resettlement (R&R) has been increased seven fold from Rs. 530 Crores to Rs. 3,500 Crores over the original pre-bid estimated. The increase in project cost has led most of the lenders to doubt the bankability of the Project.

• Due to this it has asked the CERC to revise the tariff of its Tilaiya UMPP (Jharkhand) to RS. 2.25 per unit which is more than 25% increase from the bid price of Rs. 1.77 per unit.

Sasan UMPP

R-Power has also sought compensation from the government for the falling rupee and cost escalation due to increase in taxes and input costs for its 4,000 MW Sasan UMPP at Madhya Pradesh

Krishnapatnam UMPP

• Krishnapatnam UMPP in Andhra Pradesh, which is based on imported coal, is facing regulatory issues over rise in coal prices and water costs.
• R-Power has sought a revision in tariff after Indonesia increased coal prices.

 

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More literature on this..

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/anil-ambani-led-reliance-power-seeking-tariff-increase-for-all-umpps/articleshow/21644640.cms

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Reliance Power's 4000 MW Tilaiya UMPP need to receive PSU status to get exemption for compensatory forestation requirement...

 

Reliance Power Limited's (RPower) 4,000 MW Tilaiya Ultra Mega Power Plant (UMPP) is required to receive a Public Sector Undertaking (PSU) status from the Central Government in order to be exempted by the Jharkhand Government from providing non-forest land in return for diverting forest land for the proposed mega power project.

 

As per the rules of diversion of forest land, the projects of state run companies are exempted from providing compensation in cases where forest land is diverted for the projects.

The Tilaiya Ultra Mega Power Project was an Special Purpose Vehicle (SPV) set up by the state run Power Finance Corporation (PFC) which is the nodal agency for Ultra Mega Power Projects in the country.

Later on the project was awarded to Reliance Power Limited and the SPV was transferred to it.

However, as per the Jharkhand Government, the decision is yet to be made by the Central Government on whether the Tilaiya plant will be considered a private company plant or a government plant. Based on that, they will or will not compensate for the land acquired for the plant.

 

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More literature on this topic...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/jharkhand-awaits-centre-decision-on-psu-status-for-rpower-plant/articleshow/21597560.cms

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Hurdles before RPower’s JIPL for Tilaiya UMPP…

Even as land acquisition hurdles are posing a trouble to Jharkhand Integrated Power Limited’s (JIPL’s) 4,000 MW Tilaiya ultra mega power project (UMPP), the Reliance Power wholly owned subsidiary now has to resolve the critical issue of a stupendous Rs 3,131 crore increase in Rehabilitation and Resettlement (R&R) cost over the original pre-bid estimates.

The increase in project cost, on account of the substantially higher R&R expenditure, has led most of the lenders to doubt the bankability of the Tilaiya project.

 

The power utility, to avoid any possible repercussions, has sought in principle approval from the procurers for this additional expense and the complete recovery of the amount.
through the tariff mechanism.

 

During the pre-bid stage, Envirotech and Green C consultants, appointed by Power Finance Corporation (PFC) to assess the extent of R&R involved in the project, had pegged the R&R expenditure at Rs 481 crore for both coal block and power plant areas.

 

Source: Industry Monitor

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EGoM suggest to formulate a policy on use of surplus coal by UMPPs; may cause RPower’s Tilaiya UMPP to wait for coal usage…

Power India found that the Empowered Group of Ministers (EGoM) in its meeting on April 27, has asked the Coal Ministry to formulate a policy for use of surplus or incremental coal available for Ultra Mega Power Projects (UMPPs).

Reliance Power will have to wait for a new coal surplus policy before it can use the surplus coal from its Tilaiya Ultra Mega Power Project. The Coal Ministry has been asked to formulate a policy for use of surplus or incremental coal available for ultra mega power projects (UMPPs).

 

 

The process of policy formation as suggested by the EGoM is as below:

• A committee of Secretaries will be asked to give its recommendation
• This will be followed by inter-ministerial discussions
• The Cabinet Committee of Economic Affairs (CCEA) will take a call after that.
• The new policy will be implemented prospectively

 

It is quite clear from the above process that the new policy process will not affect the permissions already give to Sasan & Chitrangi UMPPs of Reliance Power.

 

However, it will be applicable for the coal blocks allocated to the Tilaiya UMPP and hence, RPower will have to wait till the said Policy formation to use the coal of Tilaiya UMPP.

 

Some more Juice Picking

The EGoM had, in its meeting on August 14, 2008, decided to recommend to the Coal Ministry to allow use of incremental coal for other projects.Tata Power has taken issue against this approval. The matter is pending in the Supreme Court.

The Government is looking to set up 16 UMPPs in the country. Each of the projects is given fuel linkages, which means captive supply of coal. Of 16, three (Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand) has been awarded to Reliance Power and one (Mundra in Gujarat) to Tata Power.

 

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More Literature on this topic:

• http://www.thehindubusinessline.com/companies/article3398159.ece
• http://www.metisbs.com/details/news/16678/use-of-surplus-coal-reliance-power-needs-to-wait-for-new-policy.html

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