The bidding process for the 660×3 1980 mw Bara and 660×2 1320 mw Karchana projects, which was first initiated in February this year, stand to be cancelled. In a decision taken by the energy task force(ETF), headed by chief secretary Atul Kumar Gupta, the committee decided to recommend the annulment of the process and start the bidding process afresh. These recommendations by the ETF would now be put in front of the state government.
It may be mentioned that these two mega power projects that are proposed to come up in Allahabad district, have been in the eye of a storm ever since the bidding process was put on track. While nine companies had evinced interest in setting up of two thermal power projects, Lanco Infratech?s bid was found to be the lowest at Rs 2.89 per unit. But the ETF had come to the conclusion that despite having emerged as the lowest bidder for both the projects, the tariff quoted by Lanco was still very high and needed to be reduced.
The Uttar Pradesh government then decided to go ahead with a rebidding among the same nine companies, as fresh bidding would have delayed the project.
Subsequently, the rebidding threw up Reliance Energy as the lowest bidder, as it had quoted one paisa less than Lanco?s bid. However, the bid evaluation committee of the state government found that despite being the lowest of all the nine bidders, Reliance?s bid was just a paisa less than the previous bid and this did not add up to much difference.
In addition, the bid evaluation committee found that despite being responsive, the Reliance bids for both Bara and Karchhana, were the high risk ones. ?The bid was rejected on grounds of being abominably risky, with the private company in a position to walk away after having recovered the cost of its capital during the first 15 years of the project and the distribution company at the receiving end,? said an official of the energy department.
It was then that the government was forced to take a re-look of the entire process and weigh the options of calling for fresh global bids.
?The choice in front of us was a tough one. While fresh bidding can set off a delay of about four months for the two projects, going by the present quotations would have ended up with the consumers paying more. In the end, we decided to take the plunge and go for fresh bids rather than have consumers at the receiving end,? he added.
Meanwhile, the recommendations of the ETF will now be placed before the cabinet, which will then formally announce fresh bidding. The officials of the energy department are now planning to frame new guidelines for the request for proposal (RFP). ?While we will continue with the old RFQ for the fresh bidding process, we are going to work on revising the RFP, which will eliminate the high risk clauses on the one hand and also add sweeteners on the other,? he said.