By IANS
New Delhi : States can nominate private players to build hydroelectric projects till the end of 2010, without following a tariff-based competitive process, said a power ministry official.
The central government has exempted states from compliance with the stipulated tariff bidding dispensation for development of hydropower projects up to January 2011, the official said.
Central public sector utilities like National Hydroelectric Power Corp and NTPC Ltd are already exempted from bidding for allocation of state hydroelectric projects up to January 2011.
By extending a similar waiver to private developers, the government has levelled the playing field for allocation of hydroelectric projects, the official said.
The central government notified tariff-based competitive bidding guidelines for allocation of hydropower projects in January 2006 in line with the Electricity Act of 2003.
However, most of the states have not shown interest in complying with these guidelines, the official said.
Instead, states have found it more lucrative to allocate hydropower projects on criteria like upfront premium payment and free power, over and above the normal 12 percent share, which help in optimising their revenues from these projects.
States have also been conducting auctions based on these criteria rather than allotting hydroelectric projects to the lowest tariff bidders, the official said.
Since central utilities could not participate in such bidding, most of these projects went to private players, the official pointed out.
This had put the central government in a serious quandary, the official said.