Future UMPPs to be asked to source gear from domestic market

According to the new Standard Bidding Documents for power projects, the upcoming 4,000 MW capacity UMPPs secure equipment from the domestic manufacturers

Government will soon make it mandatory for companies executing ultra mega power projects in the country to buy equipment from the domestic market, a move that is seen to benefit indigenous power gear makers like BHEL and L&T.

According to the new Standard Bidding Documents (SBDs) for power projects, the upcoming 4,000 MW capacity ultra mega power projects (UMPPs) will have to secure equipment from the domestic manufacturers, sources said.

The new SBDs were approved by an Empowered Group of Ministers headed by Defence Minister A K Antony, last week.

It cleared the proposal of tweaking the standard bidding documents for implementing the new Case-II thermal power plants including the 4,000 MW UMPPs.

Power Minister Jyotiraditya Scindia after the meeting said that the suggestions of the EGoM will be incorporated and further approved by an IMG or Inter Ministerial Group.

"It was also decided in the EGoM that the final suggestions or alterations will go to the IMG for clearance and then the SBDs will become operational," sources said adding that now there is no need to back go to the EGoM again.

IMG comprises Secretaries from the Power, Coal, Finance, Law and Environment ministries. It also has representation from the Planning Commission.

However, the private power companies in anticipation of this clause had expressed their concerns to the government.

In a letter to the Finance Minister P Chidambaram, Association of Power Producers', a body representing the private power generation companies had said that if this proposal is accepted it will benefit only a few players.

At present Reliance Power which is executing three UMPPs -- Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) -- is sourcing equipment from Shanghai Electric Corp of China.