Panel says RPL 'ineligible' for 3 UMPPs, calls for probe

Company spokesperson says matter sub judice, pending in Supreme Court

Calling for a probe into the award of three ultra mega power projects (UMPPs) to Reliance Power Ltd, a parliamentary panel on Wednesday said the Union power ministry had selected an ineligible bidder for the Tilaiya, Sasan, and Krishnapatnam projects.

The report by Parliament's public accounts committee (PAC) was tabled in Parliament a day after Reliance Power pulled out of the Tilaiya power project in Jharkhand, citing inordinate delay in land acquisition.

The report by the PAC, headed by Congress leader K V Thomas, expressed serious concern over the manner in which UMPPs were awarded.

The PAC said Reliance Power "which did not fulfil the minimum technical qualifying criteria stipulated... was selected as the successful bidder" for these projects with 3,960-megawatt (Mw) capacity each.

It wanted a probe into how an "ineligible" company walked away with UMPPs.

When contacted, a Reliance Power spokesperson said: "The matter is sub judice and pending in the Supreme Court."

Also, surplus coal from the Chitrangi mine, which was to supply feedstock for the Sasan project so that it generates power at bid cost of Rs 1.19 a unit, was allowed to be diverted to the firm's other power project whose rate was already fixed based on coal linkage from costlier sources.

The panel recommended "the government to de-allocate the surplus coal/coal block from the Sasan project and utilise the same for sovereign national interest in consonance with the avowed objectives of passing on the benefit of cheaper coal to the consumers."

It said the minimum technical qualifying criteria in the tender for four UMPPs stipulated that bidder should have experience of developing projects in the last 10 years with aggregate capital costs of not not less than Rs 3,000 crore.

"The committee notes that a major part of the experiences claimed by Reliance Power was based on additions to the fixed assets instead of the prescribed capital expenditure pertaining to projects commissioned during the last 10 years," it said.

The PAC said the total experience of Rs 4,416.6 crore, Rs 3,430.21 crore and Rs 3,505.41 crore was claimed by Reliance Power while bidding for Sasan and Mundra, Krishnapatnam and Tilaiya, respectively, but the actual experienceof Rs 3,123.88 crore (Sasan and Mundra), Rs 2,137.49 crore (Krishnapatnam) and Rs 2,254.61 crore (Tilaiya) may not conform to the stipulated qualifying requirement.

While Tata Power won the Mundra project, Reliance Power won the remaining three.

To the power ministry's contention that Reliance Power had filed an experience certificate signed by a director and auditor, the PAC said the "auditor's certificate did not specifically indicate whether the costs pertained to the projects commissioned during the last 10 years."

"The committee is constrained to find that all these deficiencies/irregularities were overlooked by the multi-layered evaluation committees and all the experiences claimed by the bidder were accepted in toto without detailed examination," the report said.

It rejected the ministry's contention that the kind of projects which are eligible for qualification were not specified in tender document. It said criteria required not just project completion but commissioning as well.

"The committee is of the opinion that a thorough probe into the matter by an appropriate agency is highly warranted so as to fix responsibility and plug the loopholes in the selection process," it said.

Noting many discrepancies in the implementation of the Ultra Mega Power Projects (UMPP) in the country, the PAC asked government to commensurate with the best international practices.

"UMPP is new to our country and the ministries are finding it difficult to manage the issues pertaining to UMPPs..the committee urge the ministries of power and coal to find best international practices in the realm of UMPPs and suitably formulate benchmarks befitting the national need," it said.

The PAC expressed concerns over the manner in which the Power Ministry proceeded with the appointment of bid process management consultant for Sasan, Mundra, Krishnapatnam and Tilaiya UMPPs.

It observed "the lowest bids of ICRA of Rs 54.5 lakh and Rs 44.5 lakh for the consultancy assignments were ignored through the bidder was declared technically qualified..the work was instead awarded to E&Y at higher rates of Rs 1.28 crore each on the ground that they had more experience and were managing bid process of Anpara power project in Bangladesh."

The panel has recommended that the entire process followed for the appointment of E&Y as consultant for four UMPPs be thoroughly investigated by an appropriate agency to unearth possible manipulation and fix responsibility.

The committee has asked the power ministry to finalise the model power purchase agreements and standard bidding documents for UMPPs with promptitude and prudence and ensure the requisite legal vetting by the Department of legal affairs so that government interest is duly protected.