Bids for Rs 40k-cr mega power plants next week

Move comes four years after the last such large-sized project was bid out in 2009

The Power Finance Corporation (PFC) would, next week, invite preliminary bids for two ultra mega power projects (UMPPs) worth Rs 20,000 crore each in Odisha and Tamil Nadu.

The move is aimed at ramping up infrastructure growth at a time when investor sentiment is considered at an all-time low.

The last time bids for such a large project were held was in 2009.

The invitation for bids follows the Union Cabinet’s approval for other power projects worth Rs 88,000 crore earlier this week.

“We will issue requests for qualification (RFQs) for both Bedabahal and Cheyyur UMPPs within a week. The bids are being re-tendered, owing to the latest changes in the standard bidding documents approved by the empowered group of ministers,” said a senior official close to the development. “Both the RFQs would be issued simultaneously to make up for the lost time.”

PFC is the nodal agency for the government’s UMPP scheme initiated in 2006. Under the scheme, it was planned bids for 13 UMPPs of 4,000-Mw capacity each would be held.

Four such projects have already been awarded — Mundra in Gujarat, Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand. While the Mundra project was awarded to Tata Power, the rest were bagged by Reliance Power.

The Bedabahal UMPP would come up at Sundergarh district in Odisha. PFC had issued RFQs for the project in June 2010. The responses received were opened in August 2011.

As many as 22 companies had submitted bids, including Jindal Power, CESC, Sterlite Energy, JSW Energy, Tata Power, NTPC, Torrent, Aditya Birla Power, L&T, Adani Power, GMR and GVK.

However, owing to the delays in framing new standard bidding documents, the bid validity period has since been extended by three months six times so far. Land for the project has already been acquired and the costs have been deposited by participating distribution companies.

The other UMPP, to come up at Cheyyur district in Tamil Nadu, also has all the required clearances in place. RFQs for this would be issued for the first time.

This would be followed by the issue of request for proposals, after which companies would submit financial bids.

The bids for the new UMPPs are being invited at a time when the developers of the existing four UMPPs — Tata Power and Reliance Power — have sought a revision in rates, arguing changes in post-bid conditions, including changes in Indonesian mineral export regulations and the rise in construction costs, have made current rates unviable.