Companies seek more time; bids will be finalised by new Govt

Bidding for the ultra mega power projects (UMPP) at Bhedabahal in Odisha and Cheyyur in Tamil Nadu, of 4,000 MW each, will be deferred by at least two months. This means the winning bids for the projects, which require investments of over ₹25,000 crore each, will be declared by the new Government, expected to take charge by May.

“The bidders have sought more time to submit RFPs (request for proposal or price bid). The companies sought extension of the date by three months. However, the Government will extend it by another 8-10 weeks. The order is expected in a day or two,” a senior Power Ministry official told Business Line.

According to the official, the bidders want more time to examine several parameters before placing their bids.

Minister of Power (independent charge) Jyotiraditya M Scindia wanted to give away the power projects in the current financial year.

It was under Scindia that new bidding documents were also put in place.

In August 2013, the revised standard bidding documents were given the go-ahead by an Empowered Group of Ministers. However, the bidding is unlikely to happen now.

Companies that submitted initial bids (request for qualification or RFQ) for the power plants at Bhedabahal and Cheyyur have been asked to give price bids. The bids are expected to be opened on February 26.

Nine companies — NTPC, Tata Power, NHPC, Adani Power, JSW Energy, Jindal Power, Sterlite Infraventures, CLP India and Larsen & Toubro — have submitted bids for the ₹25,000-crore Bhedabahal power project in Odisha.

Except Tata Power, all these companies have also bid for the ₹24,200 crore imported coal-based UMPP in Tamil Nadu.

“In the new bidding norms, several other parameters such as linkage from the coal block to the power plant have to be provided by the Government. All these clauses will impact tariffs. It requires more time,” said a senior official at a private company in the race for the two power projects.

In addition, the Ministry of Environment & Forests (MoEF) has deferred the grant of environmental clearance for the UMPP at Bhedabahal in Odisha.

Green clearance on hold

On January 21, the Expert Appraisal Committee on environmental impact of thermal power and coal mine projects deferred the proposal, as details on the water balance and availability and details of rehabilitation and resettlement (R&R) were not submitted.

Power Finance Corp, the state-run company engaged in extending financial assistance to the power sector, sets up a special purpose vehicle (SPV) which secures the mandatory clearance and land for ultra mega projects. After the competitive bidding, the SPV is transferred to the winner.

At present, India has awarded four ultra mega power projects — one to Tata Power and three to Reliance Power.

So far, only Tata Power’s ultra mega power project at Mundra in Gujarat is fully operational.

(This article was published on February 23, 2014)
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