Meltdown hits proposed UP power plant

The global financial crisis has affected the prospects of a power plant, to be set up in Allahabad district of Uttar Pradesh, with the date of submission of financial bids being extended to January 5, 2009.

Earlier, the bid date was extended from November 30 to December 15. Nine companies — NTPC, Indiabulls, JP Power Ventures, Lanco Kondapalli, GVK, L&T, Adani Power, Reliance and Isolux — are in the fray.

“We have extended the bid date to January 5, 2009,” UP Power Corporation Ltd (UPPCL) Managing Director Avnish Kumar Awasthi told Business Standard.

UPPCL fears that in the prevailing economic situation, the bidders would quote higher price for supplying the electricity and the corporation is buying time, official sources said.

The government wants to set up a 1,980-Mw thermal power plant at Bara based on Super Critical Technology.

Meanwhile, the fate of the 1,320-Mw plant at Karchhna in Allahabad is still undecided due to a steeper tariff-based bid by the JP Group than the earlier two bids of Lanco and Reliance which were rejected for being on the higher side.

JP had emerged as the lowest bidder for Karchhna quoting Rs 2.97 per unit last month.

However, the bid was 37 paise higher than the earlier rejected bids.

Both the proposed plants have already been delayed by one year. The UP Energy Task Force (ETF) is in a dilemma, whether to seek fresh bidding process for Karchhna, since JP has declined to revise its bid downwards citing difficult credit market situation.

The government is awaiting the outcome of bidding for the 4,000-Mw Tilaiya Ultra Mega Power Project (UMPP) in Jharkhand by the end of this month, since it believes the bids would be higher.

“This might allow the ETF to justify the ‘higher’ bid by the JP for Karchhna and the subsequent financial bid for Bara,” said a source.

Earlier, All India Power Engineers Federation general secretary Shailendra Dubey had claimed that 37 paise higher tariff by JP would cost the government Rs 7,400 crore in 25 years, while the cost of the project itself was estimated at Rs 6,700 crore.

“The government should hand over the projects to Vidyut Utpadan Nigam so that the plants are completed on time and cheaper electricity is provided to consumers,” he added.