Adani, Sterlite, GMR & Jindal Power pull out of UMPP bidding process

Written by fe Bureau | New Delhi | Updated: Oct 16 2014, 06:26am hrs
In a setback for the countrys power sector and the governments ambitious plans of 24X7 power supply, four major power companies Adani Power, Jindal Power, Sterlite Energy and GMR Energy have pulled out of the bidding process for ultra-mega power plants (UMPP) to be set up at Cheyyur in Tamil Nadu and Bhedabahal in Odhisha.

Sources confirmed that the four companies had conveyed their decision to the power ministry. Power minister Piyush Goyal discussed the matter with the ministry officials on Wednesday. The reason for withdrawal could not be ascertained immediately.

Adani, Jindal Power and Strelite had purchased the request for proposal (RPF) documents for the Bhedabahal UMPP and GMR for the proposed Cheyyur plant after having qualified in the request for qualification (RFQ) round of the bidding process. State-owned NTPC remains the only player in the fray now after the withdrawal of these firms.

The preliminary bids for the 4,000 MW plants were invited last year after revisions in the standard bidding document for UMPPs. Under the revised norms, any escalation in cost of fuel will be passed on to the consumer as higher tariff and the companies executing projects will have to source equipment from domestic manufacturers.

The revised bid documents were, however, opposed by the power firms as under the new norms, developers were required to transfer the plants to the government after the expiry of the contract period, a move that was perceived by developers and bankers as problematic in raising finance for the project. These plants were to be developed on the build-operate-transfer model.