Business Standard cited Mr Jyotiraditya Scindia Power minister as saying that Ultra Mega Power Projects being built on coastal locations must supply power at the rate bid by developers during competitive bidding for bagging the mega projects. Mumbai based TATA Power Ltd is currently seeking a tariff hike for its 4,000 MW Mundra UMPP in Gujarat from the Central Electricity Regulatory Commission.
Mr Scindia said that "As far as UMPPs are concerned, coastal or otherwise, according to their competitive based tariff process the tariff they have bid that is what it should remain as."
Earlier, speaking at the event along with Mr Kamal Nath Urban development minister and Mr Ajit Singh civil aviation minister, Mr Scindia had voiced the government's commitment to honor sanctity of contracts for infrastructure projects so that private investor's confidence remains intact.
Regulatory changes in coal exporting nations like Indonesia and Australia have made coal dearer for UMPPs. As generation cost has jacked up, their buyers have refused to bear higher charges forcing developers to seek tariff hike. A decision on TATA Power's plea in CERC is expected soon.
Meanwhile, the INR 17,000 crore Mundra project is being implemented with 75% debt component. Fuel for the plant is being sourced largely from Indonesia. That nation's government has now linked coal exports to international benchmarks. TATA Power had earlier signed agreements for supply of power from the Mundra UMPP at INR 2.2 per unit to Gujarat, Maharashtra, Haryana, Punjab and Rajasthan.
