Audit Reports
Commercial
Report No. 6 of 2012-13 – Performance Audit of Ultra Mega Power Projects under special purpose Vehicles, Ministry of Power
Overview
Energy is one of the most critical components of infrastructure that determines the economic development of a country. The growth rate of demand for power is generally higher than the GDP growth rate. The XI Five Year Plan emphasized the need for removing infrastructure bottlenecks for sustained growth and proposed an investment of around ' 21 lakh crore in infrastructure sectors. Considering the magnitude of expansion the power sector required, Government of India (GOI) decided (November 2005) to develop Ultra Mega Power Projects (UMPPs)1, each with a projected capacity of around 4000 MW and cost of ' 16,000-20,000 crore. Ministry of Power (MOP) designated (November 2005) Power Finance Corporation Limited (PFC) as the nodal agency for the purpose of development of UMPPs through Special Purpose Vehicles (SPVs).
Out of 16 UMPPs identified so far (March 2012), PFC floated 12 SPVs as its wholly owned subsidiaries for development of UMPPs. The main activities undertaken by the SPVs are appointment of consultants, preparation of bid documents, evaluation of bids and award of projects, acquisition of land, fuel tie-up and obtaining various statutory clearances.
SPVs invited bids for six UMPPs during March 2006 to March 2012 and awarded four UMPPs, viz. Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, and Tilaiya in Jharkhand to the identified Developers. The remaining eight UMPPs are yet to be awarded. One unit of 800 MW of the Mundra UMPP was commissioned in February 2012.