Cabinet Committee on Economic Affairs on Thursday cleared amendments to the Mega Power Policy, the benefits of which can be availed by the generation firms only after fulfulling certain mandatory conditions.

“To avail the benefits under the (Mega Power) policy, the developer must tie up at least 65 per cent of the installed capacity through competitive bidding,” Finance Minister P Chidambaram told reporters after announcing that CCEA has cleared Power Ministry’s proposal of changes to the Mega Power Policy.

The remaining 35 percent of the installed capacity should be through the regulated tariff according to the host state’s policy, he said.

As per Mega Power Policy, thermal power projects of 1,000 MW, and above, capacity and hydro power projects of 500 MW and above are allowed duty-free equipment imports.

These benefits can only be availed after submission of provisional mega power project status certificate along with a fixed deposit receipt from any scheduled bank as a security for a term of 36 months.

“The maximum time period has been extended to 60 months instead of current provision of 36 months from the date of import of provisional mega projects for furnishing final mega certificates to the tax authorities,” Chidambaram added.

CCEA, also approved construction of a 220 kv transmission system from Alusteng in the Srinagar valley to Leh and inter- connection system for Drass, Kargil, Khalsti and Leh sub- stations in J&K at a cost of Rs 1,788.41 crore.

He added, “The project will be implemented through Power Grid Corp within 42 months from the date of release of the first instalment of funds.”

The project cost will be borne by the central government and the J&K Government in the ratio of 95:5, he added.

Upon commissioning of the transmission system, the same shall be transferred to the government of J&K, who will carry out Operation & Maintenance (O&M) and other related activities at their own cost as per the terms & conditions in the Memorandum of Understanding (MoU) to be signed in this regard.