Mumbai: Power Finance Corporation Ltd. (PFC), the nodal agency for executing the eight ultra mega power projects, has requested the power ministry to allow changes in the standard bidding documents so as to allow foreign companies to qualify for such projects.
“While scrutinizing the bid documents, we found several cases where the multinational companies had to be disqualified because they could not submit documents in the prescribed format,” said V.K. Garg, chairman of PFC.
These fast track power projects, each of 4000MW, have attracted the interest of several foreign players including Alstom, Korea Electric Company, China Light and Power, Allied Energy Services, Mitsui & Company and Suez Energy. PFC has been caught up in major controversy over the Sasan ultra mega power project in Madhya Pradesh. The Sasan project, which was awarded to a consortium headed by Globeleq Singapore Pte Ltd and Lanco Infratech Ltd ran into trouble with Globeleq Singapore being bought over by Lanco Infratech following an asset sale by Globeleq Singapore’s parent company Globeleq UK.
The validity of the award is presently under scrutiny by a group of cabinet ministers, known as the empowered group of ministers or EGoM.
The bidding process for the ultra mega power projects came under scrutiny over the eligiblity of Globeleq Singapore on certain financial parameters.
Typically, foreign firms have said that they would invest through special purpose vehicles, subsidiaries, joint ventures or an investment arm. They do not have a separate balance sheet nor is the technical data easily verifiable. Therefore, PFC has been relying on certificates from the company itself stating that the company fulfils the required criteria.
Several multinationals, which had initially picked up expression of interest documents for the projects, were not able to provide data in the required format. These include US investors, such as Khanjee Holdings, a Virginia-based investor in infrastructure projects with stakes in power projects in Pakistan and Iraq, as well as Malaysian, Israeli and Japanese power companies, according to the PFC. Some of the foreign power developers, such as AES and China Light and Power, withdrew after the technical evaluation stage, saying that the time given for submitting price bids was not enough.
Of the eight planned ultra mega power projects, Mundra in Gujarat, has already been awarded to Tata Power Co Ltd. The imported coal-based Krishnapatnam project in Andhra Pradesh is yet to complete financial evaluation of bids while the coal pit-head project at Tilaya, in Jharkhand, is still in a technical evaluation stage. The fate of the Sasan project could be decided after the meeting of the empowered group of ministers on 24 July.