The government is considering to make it mandatory for ultra-mega power project (UMPP) developers to obtain equipment through global bidding process, to provide a level-playing field to domestic power equipment suppliers such as BHEL and L&T.
“The Ministry of Power has to work out a scheme to give same treatment as that of NTPC to the UMPPs,” sources told PTI.
At present, state-owned power utility NTPC obtains equipment through international bidding process, while the UMPPs follow the bilateral negotiations route.
The move, sources said, would encourage domestic power equipment suppliers such as BHEL, L&T and others, which are facing tough competition from Chinese players.
Power Finance Corporation (PFC), which is the nodal agency for implementation of the UMPP, is against this proposal as it could make the large power projects unviable.
“Sourcing equipment through international competitive bidding is not possible. There cannot be two rounds of bidding,” said a PFC official.
He added that the UMPPs are awarded on competitive bidding where the lowest bidder gets the project. The lowest bid also entails the cost of equipment the company would incur while sourcing it.
“So, the cost of equipment is already accounted for at the time of bidding for the project. Therefore, a company cannot be asked to go for another level of bidding,” he added.