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The Railways on Thursday signed a power purchase agreement with Adani Power to procure electricity at ₹3.69 a unit for a three-year period.
Although a bulk consumer, Indian Railways pays steep charges for traction power. It has been procuring power through State utilities at an average rate of ₹6.75 a unit and expects annual savings of about ₹150 crore in its electricity bill, compared with the earlier tariff with NTPC.
After the Ministry of Power clarified last year that Railways has “deemed licensee status”, the public sector behemoth embarked to procure power directly from the market in a bid to reduce electricity tariffs.
This is the first step in the Railways’ strategy to procure power from the market, said a release, adding that this was as per the recommendations of the Central Electricity Authority (CEA).
Railway Energy Management Company Ltd, on behalf of North Central Railway, for the first time invited bids under case–1 bidding, in accordance with the model tender document issued by the Power Ministry.
A number of power companies participated in the open bidding process. At the Request for Qualification (RFQ) stage, 10 bids were received.
Later, at the financial bidding stage, i.e. at the Request for proposal (RFP) stage, seven bids were received. Adani Power Limited emerged the successful bidder and was awarded the contract for supply of 50 MW power, said an official release.
Speaking on the occasion, Railway Minister Suresh Prabhu said that the Agreement for Procurement of Power was a welcome move. He said efforts to tap solar energy would also help Indian Railways reduce its huge electricity costs.
Prabhu said the Ministry would soon come up with a public-private partnership model to utilise rooftops and vacant land owned by the railways for generation of solar energy.
The Ministry said it had drawn a complete action plan for sourcing of power through open access. Another tender has been floated for procuring 585 MW from the market for various Zonal Railways.
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