Centre plans to defer tariff-based bidding in hydel projects for 5 years

The central government is all set to defer mandatory tariff based bidding for hydroelectric power projects by another five years. The deferment will be based on recommendation of a taskforce headed by power minister Sushilkumar Shinde.Major government-ow ned power utilities like NHPC, Satluj Jal Vidyut Nigam (SJVNL) and Tehri Hydro Development Corporation (THDC) stand to gain from such a decision.

A task force headed by Shinde has recommended that cost-plus tariff regime be extended for the sector till January 2016, a power ministry official said. "We are very much in agreement with the task force recommendations. The hydro sector is not mature to handle competition," he said.

The task force has cited high risks and uncertainties inherent to hydropower projects. "Given their location in hilly areas, sites for hydroelectric projects suffer from adverse geological conditions and natural calamities," the official quoted the task force report.

Power minister Sushilkumar Shinde held a meeting with state energy ministers on October 24 to decide on whether to exempt hydel projects from tariff-based competitive bidding beyond January 2011.