Tilaiya financial bids to be delayed by a fortnight

The opening of the financial bids for the Tilaiya ultra mega power project (UMPP) has been delayed by a fortnight, according to industry officials.

The bids, which indicate the tariff at which power from the 4,000-Mw project will be sold, were expected to be opened by the middle of this month.

The quoted tariffs will decide which of the five bidders — Reliance Power, Lanco Infratech and NTPC Ltd, Jindal Steel and Power and Sterlite Industries — will be awarded the Rs 16,000 crore-18,000 crore project. “The bids will be delayed by a fortnight. We are seeking some additional information,” said a highly placed source close to the development. The technical bids, in which bidders mention their technical capability, were opened on December 29 last year.

Four companies, including India’s largest private electricity generator, Tata Power, and infrastructure major Larsen & Toubro, chose not to bid for the pithead coal-project despite being qualified to bid.

The bids for Tilaiya come at a time the global financial cirisis is making it difficult for companies to get funds for large projects. The credit crunch has driven up interest rates to 14-15 per cent from around 11-12 per cent a year ago.

The government is, however, planning to ease the lending norms for banks and financial institutions so that they can provide funds for UMPPs.

For the Tilaiya project, experts estimate companies to bid a tariff of berween Rs 1.19 and Rs 2 per unit of power sold. The financial bids will be known in a fortnight and will decide which company wins the project. They also estimate the financial bids to be higher than that offered by Reliance Power for the Sasan UMPP due to higher interest rates and costs of raw material.