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Home News Power Sector News NTPC, Adani, among 8 firms in fray for cheyyur UMPP in Tamil Nadu

NTPC, Adani, among 8 firms in fray for cheyyur UMPP in Tamil Nadu

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UMPPNTPC, Larsen & Toubro, JSW Energy and five other companies have submitted initial bids for the proposed 4,000-MW power project in Cheyyur, Tamil Nadu. Jindal Steel and Power, Adani Power, Sterlite Infraventure, GMR Energy and CLP India are the others in the fray for the ultra mega power project (UMPP), which will use imported coal. The project is likely to be awarded by fiscal-end. Apart from GMR, all the companies have also placed initial bids for the Bedabahal UMPP in Odisha's Sundergarh district, which will use coal from captive mines.

Interestingly, Tata Power Co Ltd, the only company that has commissioned an UMPP using imported coal, stayed away from the Cheyyur project. But it has submitted a bid for the project in Odisha.

The companies that meet the parameters will be asked to submit a proposal. The project will be awarded to the developer offering to generate electricity at the lowest rate.
Good response

The initial response to both the UMPPs is better than expected, but it is to be seen how many of these players actually respond to the request for proposal, said Debasish Mishra, Senior Director, Deloitte Touche Tohmatsu India.

"Given the current investment scenario, several players may find it difficult to raise debt in excess of Rs 20,000 crore for these projects from domestic institutions," he pointed out.

"There are major changes in the bid structure vis-à-vis the earlier UMPPs. The bidder now has to bid for a single capacity charge for year one — capturing all elements of costs spread over 25 years into this one figure could prove to be a major challenge," Mishra added.

An official at Power Finance Corp Ltd, the nodal agency holding the auction for the UMPPs, said the fuel charge is no longer a bid parameter.

"That takes away most of the variable risks of the project. Moreover, land, water and environment clearances have already been acquired for the project."

Thus far, four UMPPs have been awarded — one to Tata Power (Mundra) and three to Reliance Power Ltd (Sasan, Krishnapatnam and Tilaiya).

Source- Hindu


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