Inaugurating the third India Power Forum jointly organized by the Associated Chambers of Commerce and Industry (Assocham) and the American Embassy, the minister of state for power Jayawantiben Mehta said that a guarantee scheme was being worked out in view of the large investments involved in these generation projects.

Ms Mehta said that the "Power Trading Corporation (PTC), which will purchase the entire power from Hirma and Ennore, also requires some kind of back-up.

The government is working out the various options for some kind of guarantee and after the inter-ministerial discussions the plan will be taken to the Cabinet for its approval." According to the power secretary, AK Basu, a detailed paper outlining of the various options has been prepared by the nodal ministry and a meeting is likely to be held with the finance ministry and the Planning Commission some time next week for finalizing the structure of the support. Agreements for Hirma (3,960 mw) and Ennore (1,850 mw) were signed by the PTC with American promoters during Prime Minister Atal Bihari Vajpayee's visit to the US this month.

Mr Basu said that tariff of power from this project would be determined by the Central Electricity Regulatory Commission (CERC).

Ms Mehta said that the financial health of State Electricity Boards (SEBs) was in a bad state, which was one of the major causes of power deficiency in the country. The Centre has taken a series of steps in that direction and the Electricity Bill 2000 will force all the states to carry forward the process of reforms, added Ms Mehta.

The minister said that the Electricity Bill 2000 will be placed before the forthcoming session of the parliament. She added that a group of ministers has already approved the Bill which would address some of the problems being faced by the power projects.