The ambitious ultra mega power project scheme has received a set back with centre cancelling the bids for the two proposed plants at Bedabahal (Odisha) and Cheyyur (Tamil Nadu) citing tepid private sector response. But, In both Cases, bids of public sector companies were rejected by the centre. The country's largest thermal power producer, the NTPC, has emerged as the sole bidder for the Tamil Nadu project, NTPC and a NHPC-BHEL joint venture are in the fray for the Odisha UMPP.
If a public sector company is the only bidder then the project can be awarded. But if a private firm is the sole bidder, the tender can be scrapped as per bidding rules. But private companies and The Association of Power Producers (APP), a body representing the private firms, were lobying for cancellation tender and the centre accepted it.
"Unfortunately we did not get enough bids, we have had to scrap the process, its 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, which had 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. Power Ministry is reviewing the situation and may soon appoint an expert panel that will examine the documents to determine if the methodology adopted at the time of tendering these projects as per the request of private companies. APP also said that the DBFOT (design, build, finance, operate and transfer) model is not feasible for these UMPPs.
"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 process is being contemplated as complaints have been received by the government that the documents have not provided for a methodology which is fair. "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.
For the Tamil Nadu UMPP, the private companies in the fray were 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. Private firms which had participated in the first round of bidding for both the projects, withdrew their bids citing difficulty in securing finance for these projects.
The Odisha UMPP saw nine interested bidders, including Adani Power, CLP India, GMR Energy, Jindal Steel and Power, JSW Energy and Sterlite Energy.
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 capacity.