The Hindu Business Line : CERC seeks more clarifications on Mundra power project tariff

New Delhi, Aug. 9 After the Sasan Ultra Mega Power project imbroglio, progress on the Mundra Ultra Mega project has halted on account of bidding glitches.

The CERC has sought fresh clarifications from Coastal Gujarat Power Ltd — a special purpose vehicle set up by state-owned Power Finance Corporation (PFC) to kickstart the 4,000-MW project — about certain anomalies in its application for adoption of tariff submitted before it. The project was handed over to Tata Power in April this year after the conclusion of a tariff-based competitive bidding process.

The CERC, in an order passed on Tuesday, has pointed to the failure of the Apex Evaluation Committee that oversaw the international competitive bidding process to provide appropriate certification to the regulator on having adhered to the Power Ministry’s competitive bidding guidelines.

Evaluation committee

Under Para 6.12 of the Ministry’s competitive bidding guidelines, the Evaluation Committee was to have furnished a certificate endorsing both adherence to the Centre’s guidelines and also to the bid process established by PFC for the project. According to the regulator, the committee has failed to provide the certification in line with the prescribed norms.

To complicate matters further, the Apex Evaluation Committee was disbanded soon after the process of selection of the successful bidder was completed, even though the Ministry’s guidelines require the committee to be in place till the time of the signing of power purchase agreement.

Case of disconnect

The CERC has asked Coastal Gujarat Power to comply with the requirement, in line with the provisions of the Ministry’s guidelines. “There seems to be a clear case of disconnect between the procedure followed during the award of the project and the prescribed bidding guidelines. The guidelines are issued by Ministry of Power and the Commission has no power to deviate,” a CERC official said.

Though the adoption on the tariff by the CERC is seen as a formality since the project was awarded on the basis of competitive bidding, the process, however, could be a key prerequisite for financial closure as lenders would like the promoter to have all the clearances in place before pledging funds, sources said.

More Stories on : Power | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page