Revised guidelines for upcoming coastal-based UMPP

The government will declare revised guidelines for upcoming coastal-based ultra mega power projects (UMPPs) in the next three or four months to factor in the unforeseen escalation in fuel costs. The spurt in fuel prices has impacted existing two UMPPs at Mundra in Gujarat and Krishnapatnam in Andhra Pradesh — both coastal projects.

The ministry of power will soon refer the matter to an empowered group of ministers (EGoM) headed by Finance Minister Pranab Mukherjee to take a final call on the matter. The discussion for revised guidelines for new projects based on imported coal has already started, Two rounds of meetings had taken place between developers, procurers and the ministry on the issue.

The current power purchase agreement (PPA) for UMPPs excludes fuel from the force majeure provisions. Fuel, instead, is mentioned under Clause (a) of Article 12.4 of the PPA that lists out the ‘Force Majeure Exclusions’. Besides, the'Non-natural Force Majeure events ' specified in the PPA does not include actions by a foreign government.