Top official sources said that the group would also work out modalities for securitisation of receivables along with finalising the terms and conditions for a feasible power-purchase agreement (PPA) and other associated agreements like the transmission-supply agreement and the fuel-supply agreement for the project.

As per sources, however, before working out the securitisation of the receivables, the group will have to obtain concurrence of the states who will be beneficiaries of power from the project.

To discuss this aspect, a meeting will be fixed shortly with the five beneficiary states who have shown interest in buying power from the project.

Sources said that earlier, Power Grid was given the mandate to finalise the transmission-services agreement, for which a US-basedconsultant, Freshfields, was also engaged.

However, a number of issues related to the deemed generation and deemed commissioning could not be finalised. This issue will now be resolved by the group.

The group's members met the top brass of the power ministry and public-sector power undertakings on Wednesday to finalise the modus operandi for offering the mega power projects to the private sector. Apart from discussions on other mega power projects, the Cepa project was also discussed at length.

Sources said that in the meeting, the group opined that since there was no precedent, or a comparable case to gauge the reasonableness of tariff as negotiated by the promoters of Cepa, the SIG would like to await the outcome of the tariff from one of the other mega power projects being set up under the new policy through the international competitive bidding route.

Meanwhile, the SIG will come out with a feasible PPA, transmission-supply agreement and fuel-supply agreement for the project.

Power-ministryofficials said that the decision to place the Cepa project under the SIG's purview was taken as further evaluation of the negotiated tariff for the project by the Central Electricity Authority (CEA) was posing legal hassles.

Cepa was the only project whose tariff evaluation was done through the negotiations route, after which a tariff cost of 5.13 cents per kilo watt hour was worked out. At the same time, however, Sections 30(d) and (e) of the Electricity (Supply) Act gave the CEA the right to do an economic appraisal of the tariff, as is done for any other project under the memorandum of understanding (MoU) route.

"This was, however, objectionable to the promoters as the economic appraisal by the CEA was being done on the already negotiated tariff and not on the tariff quoted by the promoters," sources said.

In the recent mega power policy approved by the government, Cepa was included in the list of other mega power projects. This was done to take Cepa out of the CEA'a ambit, and to place it under theSIG's purview to avoid any further appraisal by the CEA.

The existing promoters of this project--Southern Electric of the US--who bought 80 per cent of shareholding of Cepa Ltd of Hong Kong, are in the process of finalising the fuel supplies for the project.

The Cepa project will be set up at Hirma in Orissa with six units of 660mw each, and is likely to come up in two phases.

Sources said that owing to escrow problems in Madhya Pradesh and Gujarat, the government plans to put up this project in two stages, the first comprising of four units, which will supply power to the northern states. The two units for the western states could come up when their security cover is acceptable to the project lenders.