Chennai, June 7: Tamil Nadu Electricity Board is to finalise soon power purchase agreements (PPAs) with 11 promoters who have been given the letter of award for implementing the Tidco-promoted multi-fuel short-gestation power projects.

This follows the Central Government directives to Tamil Nadu and other State Governments to show progress and commitment of promoters to the power projects before giving fuel allocation.

The State Government had agreed to open the liquid fuel tap for a total of 480 MW equivalent generation to five of the 11 Tidco-promoted power projects on receipt of security deposits from them. The five power projects which were recommended by Tidco for fuel allocation were Tuticorin, Gangaikondan, Manavasi, Hosur and Samayapuram.

However it is now learnt that since the Centre is insisting on the State Government showing more progress in terms of the promoters' commitment to the power projects, TNEB will be pushing through PPAs for all 11 power projects to which letters of awards have been issued to the promoters for implementing the projects.

It is claimed that tariff rates offered by promoters for Tidco projects are the most attractive ever obtained by the State Governments. Real average tariff of Rs 2.25 to Rs 2.30 per unit is far better than tariffs agreed upon to by the Kerala and Karnataka Governments, it is said.

Government sources say that the Centre has also advised State Governments to strictly implement the fuel linkage guidelines including cancellation of linkages if the promoter does not make use of the allocated fuel within six months of the sanction.

The promoters of five projects for which the State Government had recommended liquid fuel allocations are still waiting for getting the nod from the Ministry of Petroleum & Natural Gas which is the final authority on allocation of the liquid fuel.

It seems the Petroleum Ministry goes by recommendations of the Power Ministry which considers all appeal for release of liquid fuel from allotted quota and for additional quota allocations from the states. Tamil Nadu has asked for release of 480 MW of liquid fuel for the five power projects and an additional quota of fuel linkages for generating 2,000 MW of power from remaining 15 Tidco-promoted power projects.

The Petroleum Ministry will after careful evaluation of the justification of releasing the quota for the five recommended projects will route the release through the public sector oil companies. In the case of Tamil Nadu it is the Indian Oil Corporation which will coordinate the release of liquid fuel for a total of 480 MW. The promoter will be informed of the liquid fuel allocation for his project by the ministry of petroleum and natural gas.

The state government has also recommended six of the balance 11 projects for allocation of 750 MW of liquid fuel. With the nine Tidco-promoted power projects under the re-tendering process, the state government has sought the Central approval for another 1250 MW of liquid fuel. Thus the State Government would feel comfortable if the Centre agrees to release additional liquid fuel for generating 2000 MW of power.

The Government source said for 11 of the Tidco power projects promoters have paid the required security deposit of Rs 6.3 lakh per MW, half in cash and the balance half of RS 3.15 lakh through a bank guarantee. Besides the five already named, the remaining six locations for which promoters have been awarded implementation letters include: Vadipatti, Tuvakudi, Chengalpattu-2, Ranipet, Manali and Sirumugai.

Tidco is reported to have received very encouraging response with over 50 bidders buying tender documents for the nine projects for which the government ordered retendering. The nine locations for which bids are being called include: Sriperumbudur 1 & 2; Cuddalore; Gummidipoondi 1 & 2; Perundurai; Chengalpattu-1; Arakonam and Pallipalayam. Top players in power sector like L & T, Enron, Reliance and many others are evincing interest in these projects but all of them are reportedly concerned about fuel linkages.

Nevertheless Tidco intends to move fast with these nine projects.Bid documents for them will remain open until June 22 and Tidco is optimistic that many more will enter the race.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.