JP Power not to lower bid for UP power project

JP Power Ventures Ltd, which had emerged as the lowest bidder for the Rs 5,000-crore Karchhna power plant to be set up at Allahabad in Uttar Pradesh, will not lower its bid inspite of the state government not awarding it the project.

“There is no question of revising the bid. It is a competitively quoted bid,” said a senior official from the company.

The UP government, through a consultant appointed by the Uttar Pradesh Power Corporation Ltd, is already under the process of evaluating the financial bid placed by the company. The consultant will submit its report to a bid evaluation committee, which will decide the fate of the 1,320 Mw project that will increase the state’s power generation capacity by 52 per cent.

Last month, JP Power Ventures had emerged as the front-runner for the Karchhna power project. It had offered to sell electricity at Rs 2.97 per unit, almost 37 paise higher than the bids placed by Hyderabad-based Lanco Kondapalli and Anil Ambani Anil group company Reliance Power Ltd in two earlier rounds of bidding.

The state government had rejected the first two bidding rounds, saying the bids were too high.

In the first bidding round, which took place in April 2008, Lanco had emerged as the lowest bidder with Rs 2.61 per unit. The government then called for a re-bid where Reliance Power emerged as the lowest bidder after offering a tariff of Rs 2.60 per unit.

The UP government had rejected both the bids and called for a third round of bidding, hoping to bring tariffs down further. JP Power Ventures emerged as the lowest bidder in the latest round, but its bid was 37 paise higher than the other two rounds.

In the seven months between April 2008 and October 2008, UP faced an electricity deficit of over 2,300 million units, leading to a peak-time power deficit of around 22 per cent. The peak power deficit across India is around 15 per cent.