6 bidders could exit mega power projects in Odisha and Tamil Nadu

Six of the nine qualified firms could exit from the tender process for two 4000MW UMPPs (ultra mega power projects) in Odisha and Tamil Nadu unless the bid terms are reworked.

The total investment is estimated a Rs500 billion (US$8.3 billion) for the two projects. The projects will be developed on a design, build, finance, operation and transfer (DBFOT) basis. The six companies are members of Association of Power Producers (APP). The firms are the following:

• Adani group,
• CLP,
• GMR group,
• Jindal Steel & Power,
• JSW Energy and
• Tata Power.

Ashok Khurana, director general of the APP, stated:

Six out of the nine bidders for both Tamil Nadu and Odisha UMPPs have approached us to take up the matter with the power minister, stating that in its present form of DBFOT, it would be extremely difficult to further participate in the bidding process to submit price bid.

We would appreciate if you could come out with a framework that serves the development aspect more predictably and facilitates comprehensive review of the SBDs and the DBFOT model.

The three other companies involved in the the tender process are the state owned NHPC and NTPC and L&T, the only private company that is not a member of the APP.

Power Finance Corporation (PFC), the power ministry’s arm which manages the bidding for the UMPPs, had in December 2013 shortlisted the nine companies. The Request For Proposals (RFPs) were to come by February 26.

Ultra Mega Power Projects (UMPP) are a series of ambitious power projects planned by the Government of India. The power projects, each with a capacity of 4000 MW or above, are being developed with the aim to solve country´s chronic power deficits.