UMPP bid paper headed to Cabinet, Rs 1.5 lakh cr investment eyed

The Cabinet is likely to approve standard bid document for Ultra Mega Power Projects (UMPPs) based on domestic coal by next month, which will pave the way for investments of about Rs 1.5 lakh crore.

After Cabinet approval, tenders can be floated for five domestic coal-based UMPPs at Banka in Bihar, Tilaiya in Jharkhand, Bedabahal in Odisha, Deoghar in Jharkhand and Surguja in Chhattisgarh, a source said.

"The power ministry is almost ready with standard bid documents for local coal-based UMPPs. The ministry is likely to get approval of the Cabinet in a month. After that, tenders can be floated for five UMPPs with a total investment of Rs 1.5 lakh crore," the source added.

"The four UMPPs are Banka, Tilaiya, Bedabahal and Surguja. Now, Tilaiya can be tendered again as all 18 power procurers have signed the termination notice issued by Reliance Power."

About the Surguja UMPP, "though Chhattisgarh is not keen to develop the project, it can be revived and auctioned".

According to this year's Budget, a UMPP entails an investment of Rs 30,000 crore.

However, the source said it would take a while for getting the Cabinet approval for UMPPs based on imported coal.

Earlier, the bid document for domestic coal could not be put up before the Cabinet due to some legal glitch. The government had planned to float tenders for three UMPPs before the end of the last fiscal.

It has also planned Deoghar and Tilaiya UMPPs in Jharkhand in 2016-17 at an investment of Rs 60,000 crore.

In the 2015 Budget speech, Finance Minister Arun Jaitley had said the government proposed to set up five new UMPPs of 4,000 mw each in the plug-and-play mode.

All clearances and linkages will be in place before the projects are awarded by a transparent auction system. This should unlock investments to the extent of Rs 1 lakh crore, the minister had said.

The government had aborted bidding for Cheyyur (Tamil Nadu) and Bedabahal (Odisha) projects in January last year due to tepid private sector response.

The private firms, which had participated in the first round of bidding for both the projects, withdrew their bids citing difficulties in securing finances for these projects.

The bidding for Tilaiya UMPP in Jharkhand is also on the cards. All power procurers have signed the termination notice served by Reliance Power to end the contract for the project.

Reliance Power, in August 2009, had won rights to set up a 3,960-mw power plant at Hazaribagh in Jharkhand after bidding a levellised tariff of Rs 1.77 per unit, but couldn't start work on the project as the state government had not provided the required land even after more than five years.