Project Strengths

The key strengths of the Project are highlighted below:

a

ONGC’s sponsorship lending enviable strength to the project
ONGC is one of the largest and financially strongest companies in the country with proven experience in developing, implementing and operating extremely large sized infrastructure facilities spanning the entire country. ONGC owned significant gas reserves and had substantial production facilities and transportation network in Tripura which helped in facilitating expeditious implementation of the project.
b

Support by Govt. of Tripura (GOT)
GoT placed great importance on the implementation of the project and considers continued operation of the Project to be of significant importance to the state of Tripura and for this purpose it had extended its support by providing tax and other fiscal benefits to the Project, such as mentioned below which all accrued in making the tariff of the power plant very competitive,
  • Assistance in obtaining clearances/ statutory approvals,
  • Providing land at nominal rates,
  • Exemption from sales tax / VAT on the gas supplied by ONGC,
  • External infrastructure for smooth transportation of equipments and heavy machinery,
  • Water supply at nominal rates.
c

IL&FS’ Project Development role ensures robust project structure
IL&FS is a leading infrastructure development and financial services institution in the country with a successful track record in development of infrastructure projects. IL&FS Energy Development Company Limited (IEDCL), as project development advisor added significant credibility to the project development process.
d

Project Contractual Structure mitigates key implementation risks
The project contractual structure entailed extensive technical studies by renowned agencies followed by implementation through a turnkey EPC contracting route on a fixed time basis. In addition, the project implementation was monitored by independent technical agencies.
e

Gas Supply by ONGC on firm price basis places the project in a unique position vis-à-vis competing projects
The power plant had a unique advantage vis-à-vis other gas based power plants / projects in the country by virtue of the operator of the gas fields being the main project promoter. ONGC has committed long- term gas supply linkage to the power plant from its existing gas fields in vicinity of the plant at firm prices unlike all new gas based projects which have to depend on crude linked LNG or on short term (1-5 year) natural gas contracts.
f

Tax incentives
The power plant benefits from income tax holiday under Section 80(IA) which allows the company to avail a tax holiday for a period of 10 years in a block of 15 years.

By virtue of obtaining Mega Power Status under the Mega Power Policy of Government of India, the project could avail certain fiscal incentives such as exemption from customs duty. These exemptions helped in reduction of tariff and ensure project competitiveness in the long run.