Government scraps tenders for two UMPPs in Tamil Nadu and Odisha

NEW DELHI: The government has scrapped tenders for two proposed ultra-mega power projects ( UMPPs) in Odisha and Tamil Nadu following objections raised by private power firms and financial institutions that the bidding process is lopsided.

Power Minister Piyush Goyal on Thursday said an expert panel will be set up by the power ministry to examine the bidding process.

“The two bids have been scrapped for different reasons. One of the projects received a single tender and a nation does not benefit with a single tender bid, and the other due to problem of coal company and electricity company being two different entities, which is not permitted in the current scheme of things,” Goyal told reporters at a conference to mark the achievements of the NDA government.

According to the minister, the bidding process is being looked into after some entities complained that the documents have not provided for a methodology that is fair to both sides.

“It appears to be lopsided, as alleged by some bidders. I will consult experts as bankers also have flagged off the issue with me that they were unable to provide funds to finance these projects under the current dispensation,” Goyal said. “We are reviewing the situation. We are consulting experts in this field and may soon be setting up an expert group to examine the documents to ensure that we are being fair.”

Private power firms, which had participated in the first round of bidding for the two power projects of 4,000 Mw each, withdrew citing difficulties in securing finances. Power companies and banks are mainly resisting the government’s shift from build-operate-own model to design-build-financeoperate-transfer (DBFOT) model-based bidding, where the project developer will not have ownership of the land.

Companies like Adani Power, CLP India, Jindal Steel & Power, JSW Energy, Sterlite Energy, Tata Power and GMR Energy have pulled out of the two proposed projects, leaving NTPC as the sole bidder for the Tamil Nadu project and a competitor for the NHPC-BHEL joint venture for the Odisha contract.