NEW DELHI, May 1: The ministry of power has formulated a package to achieve the ninth plan target of 57,000 MW capacity addition which will require a massive investment of Rs 228,000 crore. The package has been formulated taking into account the serious constraints haunting the power sector, which in the eighth plan led to a whopping short fall of 16415 MW over the target. The new steps being initiated include;

Completion of on going projects. Ensuring full funding to ongoing projects. Higher investments in public sector undertakings like NTPC, NHPC and Power Grid. Structuring of policy to encourage private investment. Encouraging captive, cogeneration and mega projects in private sector. Model documentation for various inputs required in the finalisation of contracts by state governments with the private parties. n Allocation of liquid fuels for short gestation projects. n Streamlining and simplification of procedures for clearances. n Greater delegation of powers to the states. The non-availability of financial resources, according to the ministry sources, has been one of the major constraints in achieving the targets.

"Much would depend on whether or not state electricity boards are in a position to generate substantial resources and become viable entities for raising funds through markets", said a highly placed source in the ministry. Availability of fuels, particularly coal and gas is another problem area. The investments required in the mining sector to extract the necessary quantities of coal and in railway sector to transport the coal to the power stations are to be concurrently made for reaping the benefits of capacity addition, the sources said. As for gas, the present availability of transportation facility is not adequate. The delay in financial closure of the private sector projects is another reason inhibiting power generation. For this, the power ministry has blamed the state governments for delay in finalising the private promotors, acquisition of land, signing of power purchase agreements and other clearances. The ministry feels that the mobilisation of funds for the power projects will now become easier because of the delegation of powers to the state governments and other policy initiatives. The ministry has set the 9th plan target for capacity addition to meet the the full peak requirement at the end of the plan. This would require a total installed capacity of 143891 MW at the end of the plan. To meet the base load requirement by the end of the plan the installed capacity needed is 134869 MW. The power ministry has appointed a international consultant for preparing draft fuel supply and transportation agreements. The ministry is coordinating with the its counterparts in coal, petroleum and natural gas for expediting fuel linkages related issues for new power projects. The sources said that the ministry of coal and coal India Ltd have also appointed international consultants to finalise model documents and private project specific documents.

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