Govt reviews policy on naphtha power projects

NEW DELHI, June 4: The government is reviewing the policy on naphtha-based fast-track power projects, with a number of private producers investing in Maharashtra, Gujarat and Tamil Nadu demanding abolition of duty disparity between naphtha and other liquid fuels.

The three states which had invited tenders for 39 medium and mini fuel-based power plants are in the process of finalising them. Most companies have gone for the unrealistic project cost calculation, based onthe existing administered price mechanism for naphtha.

But these bids had not taken into consideration the fluctuations in the market price for naphtha, and the fact that other fuels are available at a much cheaper price.