Mr KC Venugopal minister of state for power informed the Lok Sabha that as per information furnished by Central Electricity Authority two Private Power producers namely, Coastal Gujarat Power Ltd for Mundra Ultra Mega Power Project and Coastal Andhra Power Ltd for Krishnapatnam Ultra Mega Power Project have sought from Ministry of Power for realignment of guidelines for power projects to insulate developers from unforeseen business risks such as change in regulation on coal price in foreign countries (from where the coal/fuel linkages are tied up).

Private power producers have sought key changes in the bidding guidelines for power projects to insulate developers from unforeseen business risks. Association of Power Producers has also requested the Ministry of Power for modifying the existing contract and constituting an Expert Committee to resolve the issue in the interest of stakeholders.

The changes in the bidding guidelines sought by power producers include fuel availability risk of domestic coal, price risk due to change in prices of fuel in coal exporting countries, delay/denial in environment & forest clearance pertaining to coal blocks etc. A committee has been set up in the Ministry of Power in response to the references received from stakeholders.

Since the Power Purchase Agreement is a legally binding document exclusively between the procurer and the developer, the Ministry has advised the lead procurers i.e. Government of Andhra Pradesh for Krishnapatnam UMPP and Govt. of Gujarat for Mundra UMPP that any issue arising therein is to be settled within the provisions of PPA by the contracting parties for which the lead procurer may take necessary action.