India’s largest power producer, NTPC approached Ministry of Power for exemption on Investment ceiling, which restrict them to participate in Ultra Mega Power Projects (UMPP) from the government.

Ministry of Power has received a request from the NTPC to exempt them from the investment ceiling of INR 50 billion, so that it can participate in the bids for the upcoming UMPPs and some other projects which are being planned by state governments.

NTPC is one of the six Maha Navratna companies, and it is allowed to take decisions on projects independently for values up to INR 50 billion. Whereas, Ultra Mega Power Project’s are expected to cost around INR 250-300 billion, which need an equity investment of over INR 75 billion from the developer. Therefore, NTPC has requested for exemption from the investment ceiling.

NTPC’s chairman and managing director Shri Arup Roy Choudhury said “For the new UMPPs, we have submitted requests for qualification and feel confident to successfully bid and win them”.

India has restored its plans for setting up UMPPs of 4,000 MW each after a gap of five years by inviting bids for two such projects in Orissa and Tamil Nadu in November. Nine companies have placed initial bids for the pithead Coal-based UMPP in Orissa, while eight have shown interest in the imported Coal-based Tamil Nadu projects.

NTPC is bidding for both projects. NTPC, which lost out to some aggressive bidding by private companies in the earlier rounds, is keen to add UMPPs in its kitty.

Sector experts also believe they are well placed this time as most power generators are struggling with huge debts and burnt their fingers in mega projects, may not have the appetite or the strength to take up UMPPs.

“NTPC has more than 35 years of experience in setting up and running of power plants. Thus, quotation by NTPC would be at a realistic price at which power plant can be set up,” said Shri Roy Choudhury.

India has so far awarded four ultra mega power projects, two of which are yet to take off. Reliance Power bagged three of these and is not eligible for bidding for another project till it completes one. Tata Power has developed the first UMPP at Mundra in Gujarat.

The government had launched UMPP of about 4,000 MW each, which would be developed by the private sector on a buildown-operate basis, to fill the growing gap between power demand and supply. But only four of the 16 such projects have been awarded so far.

The ones yet to be awarded are facing hurdles relating to environment clearances, land acquisitions and fuel linkages. While the ones already awarded are also struggling with steep rise in fuel cost.