No takers for power units

Tenders of Tamil Nadu, Odisha plants put off after poor response

Update: 2015-01-09 00:36 GMT
Representational image.

New Delhi: The Centre has cancelled bids for two proposed ultra mega power project (UMPPs) at Odisha and Tamil Nadu due to poor response from the private sector and funding issues raised by bankers.“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. So I thought it was not prudent to keep extending the date without any possible solution,”  power and coal minister Piyush Goyal said.

According to market sources, currently a large number of projects are struck due to various regulatory and fuel issues and there is a little appetite for further investments. “In fact, in the 13th Five-Year Plan, there is no significant investment planned by the private industry. People are trying to commission their projects anno-unced in the 12 the plan period,” said sources in the power industry.

The power minister pointed out that even UMPPs such as Mundra (Gujarat) and Sasan (Madhya Pradesh), which have been commissioned, are facing tariff-related issues.The companies 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. “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.

The other (tender was cancelled) due to problem of coal company and electricity company being two different entities which is not permitted in the current sch-eme of things,” he said.The 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 was 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,” the minister said. After the private companies pulled out, only NTPC and NHPC were left for bidding.

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