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Odisha gains another UMPP

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After Bhedabahal, the site of the first ultra mega power project (UMPP) in the state near Sundargarh, Odisha is likely to bag another UMPP. The state government has already chosen the site for the next UMPP.

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“We have selected Gajamara as the site for the next UMPP. The site is a very strategic location being situated close to coal mines. We proposed this site to the Union power minister Piyush Goyal today and he has given his consent. The state government has offered 1,700 acres of land for the UMPP”.

Goyal today held discussions with chief minister Naveen Patnaik on a range of issues relating to coal and power sectors.

He said the Union power ministry has already finalised the standard bidding documents (SBDs) to facilitate rebidding for UMPPs.

Fresh bids for the Bhedabahal UMPP are set to be invited by October this year.

In December last year, the Union power ministry decided to cancel the bidding process for Odisha and Tamil Nadu UMPPs. The bidding process had initiated in 2012. The ministry instead, decided to have a re-look at the SBDs and constituted a committee for the purpose.

The Power Ministry’s decision to revise the SBDs stemmed from the pull out of the private players from the bidding process. Adani Power Ltd, CLP India Ltd, Jindal Power Ltd, JSW Energy Ltd, Larsen & Toubro Ltd (L&T), National Hydro Power Corporation Ltd (NHPC), NTPC Ltd, Sterlite Infraventures Ltd and Tata Power Ltd had responded to applications of Odisha Integrated Power Ltd (OIPL), a subsidiary floated by Power Finance Corporation (PFC) for Bhedabahal UMPP.

Private players, in prior communications with the ministry of power, had raised concerns on the design, build, finance, operate, and transfer (DBFOT) model for the UMPP. They argued that under the DBFOT model, the risk was not apportioned equitably as all losses go to the power producer while gains went to the procurer.

In the final SBDs, the clauses relating to fixing responsibility on the host state over land acquisition and rehabilitation & resettlement (R&R) have been significantly diluted. Now, a decision has been taken that bidding would be done only for those UMPPs where substantial progress has been achieved on critical parameters.

The Bhedabahal UMPP needs 3,246 acres land in all that includes 2,733 acres private land, 444 acres government land and the rest 69 acres revenue forest land. Total cost of procuring land has been worked out at Rs 718 crore. Compensation of up to 91 per cent has been disbursed to the affected families.

Meenakshi, Meenakshi-B and dip side of Meenakshi coal blocks have been allocated for the 4,000 Mw UMPP. The annual requirement of fuel for the Bhedabahal UMPP has been estimated at 19-20 million tonne of coal.

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