Moneycontrol
Mar 15, 2016 08:54 PM IST | Source: PTI

Legal glitch may delay tenders for 3 UMPPs worth Rs 90K crore

Government may not be able to float tenders for three ultra mega power projects (UMPPs) entailing an investment of Rs 90,000 crore by March-end due to some legal glitch.

Legal glitch may delay tenders for 3 UMPPs worth Rs 90K crore

Government may not be able to float tenders for three ultra mega power projects (UMPPs) entailing an investment of Rs 90,000 crore by March-end due to some legal glitch.


"(It) got delayed at the last minute due to some legal issues. We will sort it out. We will still try for March but if it is not done then we will do it in April," Power Secretary P K Pujari told reporters here.


He said, "Certain issues are there, we are working on that. We are at the last leg of sorting it out. We said that we are trying to issue RFQ (first stage of auction) for at least three UMPP (by this fiscal end)."

The Power Ministry has planned to bid out three UMPPs, Cheyyur in Tamil Nadu, Bedabahal in Odisha and Banka in Bihar, this fiscal to attract an investment of about Rs 90,000 crore.


It has also planned Deoghar and Tilaiya UMPPs in Jharkhand in the next fiscal at an investment of Rs 60,000 crore.


Explaining further, Pujari said the bid document for domestic coal-based UMPPs was to go for Cabinet approval which got delayed due to legal issue while the tender document for imported coal based UMPPs is at inter-ministerial discussion stage.


In the last year budget speech, Finance Minister Arun Jaitley had said the government proposes to set up five new UMPPs of 4,000 MW each in the plug-and-play mode.


All clearances and linkages will be in place before the projects are awarded by a transparent auction system. This should unlock investments to the extent of Rs 1 lakh crore, the minister had said.


The government had aborted bidding for Cheyyur (Tamil Nadu) and Bedabahal (Odisha) due tepid private sector response in January last year.


The private firms, which had participated in the first round of bidding for both the projects, withdrew their bids citing difficulties in securing finances for these projects.


The bidding for Tilaiya UMPP in Jharkhand is also on cards as the 18 procurers of power across 10 states from the project have agreed in-principle to accept the termination letter served by Anil Ambani-led Reliance Power.


Reliance Power had served a notice to terminate the contract for the project in April last year due to inordinate delays in land acquisition.


Reliance Power, in August 2009, had won rights to set up a 3,960-MW power plant at Hazaribagh in Jharkhand after bidding a levellised tariff of Rs 1.77 per unit, but couldn't start work on the project as the state government had not provided the required land even after more than five years.


Jharkhand Integrated Power Ltd (JIPL), a special purpose vehicle created for implementing the project, had signed PPA with 18 power off-takers in 10 states for 25 years.

The project was based on captive coal blocks, for which coal was to be sourced from Kerendari BC coal mine block. The total land requirement for the project was over 17,000 acres.

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