Business

Tilaiya UMPP getting delayed

NEW DELHI: The UPA Government’s ambitious programme for capacity addition through Ultra Mega Power Projects (UMPPs) has run into trouble with the Power Ministry as well as the Power Finance Corporation (PFC), the nodal agency for implementing these projects, unable to take a decision on awarding the 4,000 MW Tilaiya UMPP in Jharkhand.

Highly placed sources said the Government had once again postponed the opening of bids for the Tilaiya project to December 29 citing the current uncertain global economic situation. The project had already faced months of delays with the opening of the bids being postponed almost four times without assigning any reason. “The fact is that there could be only two companies left in the fray for the project. As one of the companies already has two UMPPs, the government is apprehensive about allotting a third one to it. The other company had also faced controversy in the Sasan UMPP which has held back the opening of the bids for Tilaiya,” a senior official said.

“PFC decided to postpone the bidding as bidders wanted more time for placing their bids due to concerns over raising funds and getting financial closure for the project. The additional time would also be used to clear problems being faced by the railways for setting up coal transportation network for the pit-head power project,” a PFC official said.

But the Government is in a quandary on how to proceed in the situation that has emerged as majority of the bidders have opted out of the project leaving only two companies in the fray. As per the original plan, the Government wanted to complete the bidding for Tilaiya UMPP as early as July 2007. The project had already faced some delays over identification of site, getting water source and obtaining other regulatory clearances. he Tilaiya project would require Rs. 16,000-18,000-crore investment and with a debt-equity ratio of 70:30 for most power projects, raising finances is something of concern.

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