EGoM clears changes to bidding norms for thermal power plants

Aug 23, 2013

The Economic Times


NEW DELHI: A top inter-ministerial group today cleared the amendments to the bidding documents for thermal power plants, a move that will pave way for faster execution of 4,000 MW ultra mega power project scheme.


An Empowered Group of Ministers (EGOM) headed by Defence Minister A K Antony today cleared the proposal of tweaking the standard bidding documents for implementing the new Case-II thermal power plants including the 4,000 MW ultra mega power projects (UMPPs).


“The EGOM has cleared standard bidding documents for Case-II plants,” Power Minister Jyotiraditya Scindia told reporters after the meeting.


Sources said these documents will take care of risk associated with fuel price volatility and fuel availability as the fuel has been made a pass through. At the same time, clarity has been brought in the termination and other generic provisions in the contract.


The bidding will be based on single parameter bringing in more transparency in the bidding framework, sources said, adding that the framework contained in the document addresses various issues that are important for investors, lenders and procurers.


UMPPs are coal-based generation projects with an average capacity of 4,000 MW. The new bidding norms will apply to Case-II projects.


Case-I projects are where developers have the choice to decide on location, fuel and technology to be used. In Case-II, the location of the project and fuel to be used are already decided before the start of competitive bidding.


The decision is expected to speed up the process of inviting bids for proposed UMPPs in Chhattisgarh (Sarguja), Odisha (Bedabahal) and Tamil Nadu (Cheyyur). The bidding process is being revised to mitigate the risk for power producers from escalation of coal prices.


However, he added that the final document can only be unveiled in the next couple of days as the final drafting needs to be done.


“A lot of drafting needs to be done based on what has been approved in the EGoM. So, in a couple of days I shall be able to give you the details,” Scindia added.


The Government has so far allotted four UMPPs. The first at Mundra in Gujarat was awarded to Tata Power, which said in March that it had commissioned the plant.


Reliance Power bagged the others — Sasan ( Madhya Pradesh), Krishnapatnam ( Andhra Pradesh) and Tilaiya ( Jharkhand).


The new standard bidding documents (SBDs) for Case-I projects are being drafted by the Power Ministry.


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EGoM clears changes to bidding norms for thermal power plants
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