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Government aborts UMPP bidding over tepid private sector response

Piyush Goyal

New Delhi: The ambitious ultra mega power project scheme has received a set back with centre cancelling the bids for the two proposed plants at Odisha and Tamil Nadu due to tepid private sector response and funding issues raised by bankers.

“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 Minister 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 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 was fair.

“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.

However, he said: “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”.

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 to both sides.

“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.

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.

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