Arunachal Pradesh to follow PPP model for power generation

New Delhi, Dec 17 (UNI) Arunachal Pradesh Chief Minister Gegong Apang announced that Arunachal Pradesh Hydro Power Corporation Ltd (APHPC) will pursue the public-private-partnership (PPP) model to generate hydro power in the state.

Under this initiative, 42 out of the 89 Hydro Electric Projects (HEPs) identified by Central Electricity Authority's preliminary ranking study, under the plan to generate 50,000 megawatt (MW) of power in the state as announced by Prime Minister Manmohan Singh, seven HEPs with a combined capacity of 10,230 MW have been allotted to the central public sector undertakings (CPSUs) and 11 HEPs with 8,390 MW capacity to private players, Mr Apang told reporters at a workshop held here yesterday.

Two of the projects have been allotted to Anil Ambani-owned Reliance Energy Ltd. ''The projects are to generate 1,700 MW (1,000 MW and 700 MW) of power. The company will invest Rs 8,500 crore in the projects,'' company Senior VP (EPC-Hydro) Arun Bahadur said.

Jaypee Group's Jai Prakash Associates Ltd, which has been assigned two HEPs of 2,100 MW capacity (1,600 MW and 500 MW), will invest Rs 11,000 crore, company Director Suren Jain said.

''Incorporated under the Companies Act 1956, APHPC will takeover all assets and liabilities belonging to the power sector in the state from the state government through a Memorandum of Understanding (MoU) or any other instrument of agreement for the hydro power generation,'' the chief minister said.

He said the corporation will put in place a flagship special purpose vehicle (SPV) that will hold equity in the various independent power producers coming to Arunachal Pradesh through competitive bidding route.

''I would request the Planning Commission to allocate a special grant of Rs 8,363.14 crore to enable the state government to have equity participation in the projects allotted to private developers and the CPSUs,'' Mr Apang said.

To introduce high degree of professionalism and ensure smooth coordination among the three important aspects of the power sector -- generation, transmission and distribution -- the state government has formed this power corporation and the state government is determined to develop this hydro-electric potential in an ''efficient, economic and sustainable manner'', he added.

The private companies will execute the projects on build, own, operate and transfer basis and will not be given any financial assistance by the state government, State Power Secretary T Bagra said.

''Atleast 12 per cent of the power generated would be supplied free of cost to the state,'' he added.

The state government will purchase the power from private players through a power purchase agreement. ''The payments will be guaranteed by the government,'' Mr Bagra said.

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