MIDC invites bids for 1,320 MW Bhadrawati thermal power project

Bidder offering highest upfront premium or discounted tariff to bag BOOT contract

Maharashtra, which is currently facing a daily shortfall of 500 MW, has for the first time initiated process to add generation capacity based on discounted tariff  or highest upfront premium basis for thermal power project.

The state-run Maharashtra Industrial Development Corporation (MIDC) has invited bids for 13,20 MW thermal power plant at Bhadrawati in the coal rich Chandrapur district under build, own, operate and transfer (BOOT) basis.  

MIDC has engaged Infrastructure Development Finance Company (IDFC) under its India Infrastructure Initiative for providing project preparation and partner selection services.
MIDC official, who is currently involved in the bidding process, told Business Standard, “Bidder who will give highest upfront premium or offer discounted tariff will be given contract for the proposed project. Power will be made available to local industrial consumers. This is almost similar to case II bidding where in the developer is expected to bid on the basis of specific fuel and location. In case of Bhadrawati project, MIDC owns and is in possession of 1,300 acre of land at site free of any encumbrances and rehabilitation issues.”

Besides, the official said ministry of environment and forests (MoEF) has cleared terms of reference for environment impact assessment study which has been completed and submitted to MoEF along with application for environment clearance.

Furthermore, state water resources department has already issued for making water availability for the Bhadrawati project and an application for long term coal linkage was made to the standing linkage committee. The Central Electricity Authority has recommended the project for coal linkage and the recommendation has been forwarded by the power ministry.  The transmission network is available in the vicinity of the site.

MIDC’s move comes at a time when MahaGenco was carrying out 3,230 MW capacity addition. This apart, private sector developers are in the process to add more than 5,000 MW. Further, the  distribution company, MahaVitaran is procuring power from the open market through short term, medium term and long term contracts as Maharashtra’s demand for power is expected to increase by 700 MW annually.

Earlier, state government’s efforts for the setting up of power project at Bhadrawati failed to materialize. In 1990s, the Ispat group had proposed to set up 1,920 MW thermal project at Bhadrawati and later in April 2005. However, the project development did not take off due to issues relating to land acquisition and fuel linkage.

However, managing director of a power company, who did not want to be identified, raised doubts over the implementation of Bhadrawati project on BOOT basis in the absence of 25 year long power purchase agreement. “There are issues if the developer wants to operate project and sell project through open access which is currently available for one year which needs to be renewed thereafter. The developer will face a lot of problems in the mobilization of funds especially from banks,” he noted.

Meanwhile,  MahaGenco, with installed capacity of  9737 MW of thermal, hydel and gas based units,  has floated tender to initially purchase two units of 30 MW each at its Parli power station in Marathwada region for further use as captive plant or commercial generation or any other purpose like scrap. These units have outlived their life cycle.