Global firms to evaluate bids for Krishnapatnam power project

Globalfirms to evaluate bids for Krishnapatnam power project

Learning lessons from the Sasan ultra mega power project (UMPP), the power ministry has this time appointed international firms to thoroughly evaluate bids submitted for the country’s third UMPP, coming up at Krishnapatnam in Andhra Pradesh.

The Union power minister, Sushil Kumar Shinde, announced this in Visakhapatnam on Sunday. He, however, did not name the global firms. “There were some flaws in the tenders submitted for the Sasan project and we have corrected it," he said.

Shinde was here for the foundation stone-laying ceremony of the 1,000MW thermal power project coming up under Simhadri Stage-II of the National Thermal Power Corp. (NTPC), the country’s largest power utility that accounts for 29% of national power generation.

The Power Finance Corp., the agency that is holding the bids for the power projects, had extended the deadline for companies to submit proposals for the 4,000MW Krishnapatnam UMPP to 21 September. The deadline has been moved four times from the original deadline of 9 March. The Krishnapatnam project is one of the nine coal-based mega power projects of 4,000MW each which the Centre proposes to set up across the country.

Shinde was responding to reporters’ queries on the reasons for delay in finalizing the bidder and awarding the Krishnapatnam project. He said the government did not want to give any scope for the sort of flaws that were experienced in the Sasan episode. “Now, everything is clear and we expect it (the finalization of bids for Krishnapatnam) in the next 15 days."

The firms that have shown interest so far in bidding for the Krishnapatnam project include NTPC, Tata Power Co., Larsen & Toubro Ltd, Reliance Energy Ltd, Essar Group, Torrent Energy Ltd, Sterlite Industries, DS Construction and Sumitomo Corp.

Simhadri Stage-II

The 1,000MW project of Simhadri Stage-II, coming up in two units of 500MW each, is estimated to cost more than Rs5,000 crore, NTPC chairman and managing director T. Sankaralingam said. With a debt-equity ratio of 70:30, the project is estimated to require 5.9 million tonnes of coal a year. While the first unit would take off in 2010, the second unit would be operational by 2011.

The first stage of the Simhadri project, with a capacity of 1,000MW, was commissioned in August 2002. This was the first coal-based project by NTPC where the power generated was allocated to the home state—Andhra Pradesh.

But this time, Shinde refused to accept Andhra Pradesh chief minister, Y.S. Rajasekhara Reddy’s request to allocate at least 85% of the power produced in the Simhadri Stage-II to the home state.

“Nowhere in the country is NTPC’s power being allocated to states like that. It was in special circumstances that the entire power generated at Simhadri Stage-I was allocated to AP. We can’t go on doing that," he said.