Govt accepts PSU power cos at disadvantage in UMPP bidding

Government today acknowledged in the Lok Sabha that public sector power companies are at a disadvantage while bidding for ultra mega power projects (UMPP) because of various "handicaps" and promised to remove these to make them competitive.

Replying to questions, Minister of State for Power Jairam Ramesh said government, under no circumstances, wanted the public sector power companies like National Thermal Power Corporation (NTPC) to be handicapped during the bidding.

He acknowledged that the public sector companies face disadvantages during bidding and said all such handicaps, whether due to Central Vigilance Commission (CVC) guidelines or procurement, will be removed.

Ramesh was responding when pointed out that NTPC had lost the bid for Tilaiya ultra mega power project being built in Tamil Nadu as the public sector company had quoted higher tariff plan for electricity than a private firm.

In this particular case, he said while NTPC quoted Rs 2.24 per unit for power generated, private company got the contract as it quoted Rs 1.77 per unit.

"We are looking into why public sector companies quote higher tariff. If government intervention is needed, we will do it," Ramesh said.

He said removal of these "disadvantages" is necessary as private projects will in future be awarded on the basis of tariff-based competitive bidding.