The government’s high-level selection committee meeting has cleared 11 bidders for the second stage of competitive bidding for the 4,000MW Tilaiya ultra mega power project, or UMPP, estimated to require an investment of Rs16,000 crore.
The bids of Citra Thermal Power and Infrastructure Ltd, an Indian company, and Dian Wijaya Sdn Bhd. of Malaysia were rejected due to incomplete information.
The 11 bidders cleared for the next stage are NTPC Ltd, Torrent Group, Essar Power Ltd, Reliance Power Ltd, Tata Power Ltd, Larsen and Toubro Ltd, AES India, GVK Power and Infrastructure Ltd, Jindal Steel and Power Ltd, Sterlite Industries (India) Ltd and Lanco Infratech Ltd.
GVK and Lanco have bid with Malaysia’s YTL Corp. Bhd. and Genting Sanyen Power Sdn Bhd, respectively.
“The shortlisting is over and the letters inviting request for proposal (RFP) will be shortly be sent out. The two bids were rejected because the information offered by them was incomplete,” a senior government official, who did not wish to be identified, said.
T.S. Bhattacharya, managing director, State Bank of India, is the head of the committee. Other members include R. Dahiya, member, thermal, Central Electricity Authority, directors from Power Finance Corp., the nodal agency for setting up UMPPs, and representatives of Infrastructure Development Finance Co. Ltd and Citibank India.
The deadline for the second stage, or the RFP, is 23 March. The committee hopes to award the project by 23 June.
Tilaiya is one of three projects being bid out. The others yet to be awarded are Cuddalore in Tamil Nadu and Jharsuguda in Orissa.
Analysts believe that the project, which will be situated near a coal pithead, will see aggressive bidding. The earlier pithead project at Sasan in Madhya Pradesh that was bid out saw the lowest tariff quoted in the country, Rs1.19 per unit, by Reliance Power Ltd.
“The bids are expected to be in the similar range as that of Sasan project and I expect the winning bids to be around Rs1.30 per unit,” says Abhishek Puri, associate analyst at JM Financial Ask Securities Pvt. Ltd.
The government’s UMPP programme has had its fair share of problems. Of the 11 proposed projects, six are on track. The Centre is expected to abandon plans to set up UMPPs at Girye in Maharashtra, Tadri in Karnataka and Akaltara in Chhattisgarh for reasons ranging from environmental concerns to differences with the state governments.
The Jharkhand project, too, has faced hurdles due to law and order problems associated with leftist extremist activism. Land acquisition for the project also is an issue, especially since it will lead to displacement of tribals.
“No land details are available for the project. Any delay in land allocation will delay the project. Complete land allocation was earlier scheduled to be done by April 2008. We do not see that happening now,” the official added.