India's Power Ministry Seeks to Secure Coal Linkages for Second Ultra-Mega Power Project in Odisha

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Researched by Industrial Info Resources India (New Delhi, India)--In a bid to ensure a fuel linkage for the Ghogarpalli Ultra-Mega Power Project (UMPP), which is proposed to be developed in the state of Odisha, the Indian Ministry of Power has called on the country's Coal Ministry to allocate the Ghogarpalli and Dipside of Ghogarpalli coal blocks to Ghogarpalli Integrated Power Company Limited, a special-purpose vehicle floated by the state-run Power Finance Corporation (BSE:532810) (PFC) (New Delhi, India) for the execution of the 4,000-megawatt (MW), pit-head power project in the state.

This 4,000-MW project is the second UMPP after the one in Bedabahal in the Sundargarh district for which a shell company, Orissa Integrated Power Limited, has been formed. A total of three UMPPs have been proposed to be developed in the coal-rich eastern state, which is estimated to have a reserve of 257.38 billion tonnes, comprising 5.313 billion tonnes of coking coal, 27.04 billion tonnes of medium and semi-coking coal, and 225.03 billion tonnes of non-coking thermal coal. However, due to various constrains, including stringent environment policies, much of these reserves have remained unexploited.

Fuel constraints already have derailed a 4,000-MW UMPP in the state of Chhattisgarh, another coal-rich state in central India. Thus, to prevent the recurrence of such a situation, the Power Ministry has sought the expeditious allocation of the two coal blocks that are earmarked for the project in Odisha.

The government of India, through PFC, has so far allotted four such UMPPs, of which contracts for three projects--Sasan UMPP in Madhya Pradesh, Krishnapattnam UMPP in Andhra Pradesh, and Tilaiya UMPP in Jharkhand--have been awarded to Reliance Power Limited (BSE:532939), while Tata Power Company Limited (BSE:500400) is developing the Mundra UMPP in Gujarat.

PFC has been appointed as the nodal agency by the government of India for the execution of UMPPs in the country. As per UMPP guidelines, PFC floats requests for qualification to shortlist bidders on the basis of technical capabilities. Subsequent to this first round of the selection process, under the international competitive bidding process, qualifying bidders are invited to submit final financial bids.

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