Centre Bid to Give New Lease of Life to UMPPs

With lukewarm response to two ultra mega power projects in Odisha and TN, govt plans to set up new review panel to study the projects

Published: 09th January 2015 06:03 AM  |   Last Updated: 09th January 2015 06:03 AM   |  A+A-

NEW DELHI: In a major setback to government’s ambitious ultra mega power project (UMPP) scheme, the Centre had to cancel bids for two proposed plants one each at Odisha and Tamil Nadu as response from the private sector was lukewarm coupled with funding issues as raised by the banks.

“Unfortunately we did not get enough bids, we have had to scrap the process, it’s a process which was initiated before this government came in, I thought it was not prudent to keep extending the date without any possible solution,” Power and  Coal Minister Piyush Goyal said.

The private firms, that participated in the first round of bidding for two 4,000 MW each UMPP in Odisha and Tamil Nadu withdrew their bids citing difficulties in securing finances for these proposed projects.

Goyal was speaking at a conference to unveil a pocket book on the six-month achievements of Prime Minister Narendra Modi-led NDA government in the power, coal and renewable sectors.

“The two bids have been scrapped for different reasons, one of the projects received a single tender and a nation does not benefit most with a single tender bid and the other due to problem of coal company and electricity company being two different entities which is not permitted in the current scheme of things,” Goyal said.

The ministry of power will review the situation soon and likely to appoint an expert panel that will examine the documents to determine if the methodology adopted at the time of tendering these projects was fair.

The Minister also added “We are reviewing the entire situation. We are consulting experts in this field and may soon be setting up an expert group to examine the documents to ensure that we are being fair”.    

Bidders have complained to the government about certain discrepancies in the methodology about the bid process.

“It appears to be lopsided as alleged by some bidders, I will consult experts as bankers also have flagged off the issue with me that they were unable to provide funds to finance these projects under the current dispensation,” he added.

Those private power producers who bid for Tamil Nadu UMPP, include Adani Power, CLP India, Jindal Steel & power, JSW Energy, Sterlite Energy and Tata Power. Of these, four bought the Request For Proposal document but decided not to go ahead further in the process.

For the Odisha UMPP nine bidders, including Adani Power, CLP India, GMR Energy, Jindal Steel and Power, JSW Energy and Sterlite Energy were in the fray.

After the private companies pulled out, only NTPC and NHPC were left for bidding.

UMPP is a coal-based power project of 4,000 MW generation capacities to accelerate power generation in the country the government had invited both private and public sector power companies to join and bid for UMPPs.

The next round of bidding will be after the government streamlines and irons out the issues as raised by the private players.

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