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September 25, 2003 
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Centre plans to liberalise power norms for SEZs

The Central government is planning to add new features to its special economic zone (SEZ) policy to take advantage of the new clauses in the Electricity Act for ensuring uninterrupted and affordable power supply to SEZ units.

 
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Corporates keen to set up power generation, transmission and distribution businesses in SEZs are in for a big bonanza. The government has decided to exempt them from customs, excise and service tax on inputs. They can import equipment without paying duty or get excise exemption on inputs sourced from the domestic market.

 

The improved SEZ policy will enable developers to sell independent power to customers within the SEZ at mutually negotiated rates, without going to the state regulatory commission for approval. These projects will function almost like the captive plants, which sell powers to its

consumers directly. But in this case, there will be several consumers - all units located in the SEZ. While the rate at which the power will be sold will be determined mutually by the developer and the consumers, selling power directly to the consumers will ensure regular payments for power companies. Moreover, as the customers are industrial consumers, the developers would have a major business opportunity. The policy also allows the power developers to sell the surplus power to the grid at the rates fixed by the regulator. Print this Article

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