Those thermal stations which are of and above 1000 MW capacity and hydel stations of and above 500 MW capacities are designated as Mega power projects (MPPs) by MOP and the following concessions are offered to the projects among other things:
· No customs duty for imports
· Government of India will direct the state governments to exempt the projects from local taxes and duties
· No income tax for ten years preferred by developer with in 15 years after commissioning of the projects.

Those thermal stations which are of and above 1000 MW capacity and hydel stations of and above 500 MW capacities are designated as Mega power projects (MPPs) by MOP and the following concessions are offered to the projects among other things:
· No customs duty for imports
· Government of India will direct the state governments to exempt the projects from local taxes and duties
· No income tax for ten years preferred by developer with in 15 years after commissioning of the projects.
Consequent to the reduction in capital cost, the tariff of power generated will be low. The conditionalities imposed to get this cheap power to any state , according to the Mega Power Policy are (1) formation of SERC and (2) distribution in cities whose population is of and above 10 lakhs are to be privatized “to enable payment security.”
This provision of privatizing the distribution has been opposed by the southern states which the centre has ignored.
The Ultra Mega power policy is an extension of the Mega power policy with additional privileges offered to the private capital to facilitate privatization in power sector. The private capital both Indian and foreign were not satisfied with the structural changes and legal frame work already made to suit the neo-liberal policies. They need super profits. Their aspirations are facilitated through the National Electricity policy and Tariff policy.
The miserable failure in performance by private power sector is taken by the Government of India as an alibi to facilitate high level of profiteering. The Ultra Mega Power Policy is framed with this end in view.
Those projects which are having an installed capacity of more than 4000 MW are designated as Ultra Mega projects. Sites are selected for such projects at Maharastra, Gujrth, MP, Chathisghut, Orisa, Andrapradesh and Karnataka. Projects at Maharastra, Gujrath, Andrapradesh and Karnataka will be imported coal fired projects. The criteria for selecting sites at these seven states are unknown. This will only lead to unevenness in development in states.
Power Finance Corporation is appointed by government of India as a nodal agency for site development, obtaining statutory clearances and for selecting the private power developer.GOI is allowing only private capital to set up the Ultra Mega power projects. The selection of the private power developer is said to be based on the lowest quote on tariff for the specific quality of power they have to produce.
The additional privileges provided to Ultra Mega Projects when compared to Mega power projects are as follows:
Ø The project developers will get stakes in the newly formed distribution companies consequent to the stipulation that those states which intends to purchase power from Mega Power Projects have to privatize the distribution of towns which are having one million or more population.
Ø The project development charges are born by Power Finance Corporation.

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