Government eases norms for UMPP in Odisha, Tamil Nadu to attract developers in a slowing economy

NEW DELHI: The government has eased qualification norms for companies bidding for the two proposed ultra mega power projects in Odisha and Tamil Nadu and also amended a clause on fuel charge to attract developers in a slowing economy.

Ashok Lavasa, additional secretary in the power ministry, said the capital cost requirement has been brought down to 5 per cent from 10 per cent, which means a bidder will now be able to include in its experience a project executed by it that was worth 5 per cent of the proposed UMPP’s cost. The two proposed UMPPs are estimated to cost Rs 25,000 crore each. Last date for submitting technical bids for the projects is November 11.

“We took record of the slowdown that impacted project implementation over the past five years and also the fact that power plants require huge capital unlike other infrastructure projects like roads and highways,” Lavasa told a pre-bid conference. “We decided to change the clauses based on industry response.”


A bidder will now be able to include an infrastructure project executed by it worth Rs 1,260 crore in its experience to participate in the bidding for the proposed UMPP at Bedhabahal in Odisha. This threshold was earlier Rs 2,520 crore. Similarly, a project worth Rs 1,210 crore can be included by a bidder as against Rs 2,420 crore to bid for the Cheyyur UMPP in Tamil Nadu.

The government has also asked bidders to include projects implemented by them over the past seven years against five years specified earlier to qualify for the UMPPs. It has also amended a clause indicating the fuel charge of both UMPPs.

The fuel charge for the projects will be notified at the second stage of bidding. “The fuel cost of Odisha projects will be specified after detailed exploration of the three attached coal blocks. Coal cost for Cheyyur project will also be decided at later stage,” Lavasa said.

The government had specified a fuel charge of Rs 0.356 per unit for the Odisha UMPP, which has three attached coal mines. The fuel cost for imported coal-based UMPP in Tamil Nadu will be fixed via South African index.