Significantly, Price Waterhouse, the technical and financial consultant advising the Haryana government over execution of the project, has proposed to restrict the state government's exposure in the tariff by introducing a cap on the foreign exchange component of the tariff.

Top industry sources told The Financial Express that it has been proposed that for the tariffs quoted by the potential bidders, while submitting their financial bids for the project, only 30 per cent of the tariff will be linked with the rupee-dollar fluctuation, 10 per cent will be linked with the WPI and for the balance 60 per cent, there will be no variation.It may be mentioned here that the final bids to be submitted under the `request for proposal' (RFP) by the qualified companies will be tariff-based and the award of contract will be on the basis of the lowest tariff quoted by a company. The tender inviting RFP bids for the project is proposed to be floated sometime early next month.

Sources said during a recent meeting of the potential companies with Price Waterhouse and the state government officials, it was clarified that while inviting the tenders for the RFP, the entire dollar component of the project will not be a pass-through, as has been the practice till date, and only part of it will be allowed as a pass-through.

Various other issues as regards the power purchase agreement (PPA) and the state support agreement also emerged in the meeting. The name of the winner would be finalised on the best terms and conditions offered for the PPA and state support agreement, besides an appropriate tariff. The whole process, sources said, will take another two to three months.

Following unbundling of the SEB into three independent entities, namely the Haryana Power Generation Company (HPGC), Haryana Vidyut Prasaran Nigam (HVPN) and the distribution company, it seems that the state is adopting a overcautious approach as regard execution of power projects by the private sector in Haryana. A cap on the forex component of tariff is one such step in this direction.

Earlier the controversial Italian conglomerate, Eisenberg was to take up the development of this project and had even signed a PPA with the state electricity board for executing the project. However, following a change in government in the state, Eisenberg was asked to bring down the levels of power tariff as against the ones mentioned in the PPA. The negotiations finally fell through and Eisenberg even went to the Delhi high court, filing a case against the state government.