An ambitious programme to start 18 power projects and add 9319 MWe to India’s national generating capacity did not meets its 31 March deadline. Analysts in India said that in spite of assurances from the government, the deadlines take no account of reality.

As the government tries to speed development of IPPs, it said private developers will lose their fuel allocations if they do not meet the deadline. At least 52 private projects with aggregate capacity of 15 960 MWe await financial closure.

Closure is hampered by a number of issues, including fuel supply agreements. Fuel supply deals have been difficult to close because prices fixed by the ministries in the form of commitment and fuel handling charges are very high the developers claim.

IPPs have to seek payment guarantees because of possible default by state power companies, many of which are in financial difficulty.

India has an installed capacity of 85 000 MWe. It needed to add 47 000 MWe between 1997 and 2002 to meet its targets but the Planning Commission has already indicated that only around 40 000 MWe will be added during this five year period.