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Fulfill conditions for fast-track projects, says Alagh

Of the eight fast-track projects, only in two projects -- Dabhol Power promoted by Enron Corporation and GVK project promoted by Spectrum -- have workers started constructing the plants while others are still pending with no financial closure due to non-fulfilment of the stipulated conditions of the government.

However, Alagh said that there were 20 projects in the private sector without having any counter-guarantee clause from the government. After two years of slow down and a negative growth rate of 8 per cent in April and 2 per cent in may last year, the power sector has been growing at around 7 to 8 per cent every month now.

The 20 power projects with a capacity of 7500 mw and at a cost of US 7 billion have been tied up in terms of finances with the Indian financial institutions. While the Indian institutions committed assistance of over US dollar 3 billion, the remaining finances would come from foreign direct investment and borrowings, he said.

Alagh emphasised that some of these projects were large enough to compare with the counter-guarantee projects. These projects include the 1070 mw Korba East thermal power project, 578 mw Bina thermal project, and 500 mw Balagarh thermal project.

For these projects, he said the site had been located, technology was determined and approved, environmental clearance obtained and fuel supply sources were identified. These projects are now available for the settlement of fuel supply agreement, power purchase agreement and financial closure.

Alagh was speaking at the Global India Conference in Bombay organised by the All-India Association of Industries.

Dispelling the fear of a slowdown in decision-making and clearance of power projects in view of the Lok Sabha election, Alagh said there was every reason to believe that the power sector would continue to expand on the foundations already laid and there was no reason to believe that many decisions required in the ensuing weeks and months could not be taken.

The future growth of the power sector in India would critically depend on the systems ability to finalise projects with lower tariffs on the structure and quality of its regulatory commissions, their capability in handing the extremely difficult tasks being assigned to them, and the framing of their regulations in a manner that would open up the sector for greater efficiency and competition, he said.

UNI