PAC blasts UPA govt for tilting UMPP bidding in Reliance Power’s favour

By: |
New Delhi | Updated: April 30, 2015 5:05:34 AM

Out of the 16 envisaged projects, only four have been awarded so far, with Reliance Power grabbing three and Tata Power bagging the other one.

The public accounts committee of Parliament has severely criticised the previous UPA government for tilting the bidding process for ultra mega power projects (UMPPs) in favour of Reliance Power.

In its report tabled in Parliament on Wednesday, the PAC, headed by KV Thomas, said the decision of the ministry of power to scale down the equity holding requirement in parent/affiliate of a bidding company for UMPP projects from the originally envisaged 51% in March 2006 to 26% a couple of month later on the request of the bidder and advice of the consultant EY went against the basic accounting tenets of ownership and control.

“Such a change in equity holding requirement of parent/affiliate directly benefited Reliance Power which did not have any technical or financial capability of its own to bid for Sasan, Mundra and Krishnapatnam UMPPs but did so by using technical and financial capability of Reliance Energy which had an equity holding of only 26% in Reliance Power,” the report said.

UMPP

The UMPPs were bid by the government nodal agency Power Finance Corporation (PFC) through a wholly-owned special purpose vehicle. Out of the 16 envisaged projects, only four have been awarded so far, with Reliance Power grabbing three and Tata Power bagging the other one. These four projects were awarded in 2006-07.

Further, the report lambasted the bidding system for its failure to verify the claim of experience submitted by Reliance Power which resulted in the company being selected as the qualified bidder despite not fulfilling the mandatory qualifying criteria.

For Updates Check Economy News; follow us on Facebook and Twitter

Do you know What is Long Term Capital Gains Tax, Repo Rate, Repo Linked Lending Rate (RLLR), Wholesale Price Index (WPI), Public Debt? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Farmers who commit suicide are cowards, says BJP minister, draws flak from Rahul Gandhi
2PM Narendra Modi Cabinet nod for Smart City Project
3Rahul Gandhi takes a swipe at PM Narendra Modi’s ‘Make in India’ campaign