Union Budget: More ultra mega projects indicated

New Delhi: The Finance Minister, Mr P. Chidambaram, announced a new fund in the power sector that focussed on transmission and distribution reforms. The Budget also clearly indicated that the Government would be pushing for at least five new Ultra Mega Power Projects (UMPPs) to the bidding stage, with three of these already having been awarded to private sector players and a fourth one slated to be awarded shortly.

“It is possible to bring in five more UMPPs in Chhattisgarh, Karnataka, Maharashtra, Orissa and Tamil Nadu to the bidding stage, provided the States extend the required support..,” Mr Chidambaram said. On the new fund for T&D reforms, Mr Chidambaram said the “details of the scheme would be worked out and announced very soon”.

He also said that by end-March 2008, the Government would achieve commercial operation date (COD) on about 10,000 MW, marking the best first year of any Plan period. The Eleventh Plan target for additional power generation capacity is 78,577 MW. “The Government will redouble efforts to ensure that the ambitious target for the Eleventh Plan is achieved,” he said.

The FM proposed to provide Rs 800 crore in 2008-09 for the ongoing Accelerated Power Development and Reforms Programme and Rs 5,500 crore for the Rajiv Gandhi Grameen Vidyutikaran Yojana.

Other proposals:

Other Budget proposals impacting the sector include an announcement to reduce general project import duty from 7.5 per cent to 5 per cent. Besides, for projects (other than those designated as Mega Power Projects), the exemption from additional customs duty of 4 per cent has been withdrawn. An additional customs duty has also been introduced on goods for high voltage transmission and distribution projects.