Power Min says changes in bidding docs in the offing

A senior Union Power Ministry official today said the government is considering changes in the standard bidding documents for awarding power projects in future, but ruled out any modifications in the existing contracts.

"The standard bidding documents are under extensive review," Special Secretary in the Power Ministry G B Pradhan told reporters on the sidelines of an energy summit here today. He, however, added that changes will be considered in future projects but not in the existing contracts.  One of the most contentious issues faced by power project developers is the increase in the price of imported coal, especially from Indonesia, due to the changes in pricing policy in that country. Last year Indonesian parliament passed a legislation which made it mandatory for all the coal mines to sell their produce at the prevailing international prices and not below to their sister/parent companies abroad with a view to maximise revenues at a time the demand for the black gold is steeply rising. Many Indian companies such as Tata Steel, Mercator Lines, GVK Power, GMR Group, the Anil Ambani Group etc already own coal mines in that country, and thus will be impacted with this policy. Power producers have been persuading the government to modify the existing standard bidding documents for competitive bidding in the international markets to resolve the issue. They have also expressed their inability to honour contracts bagged under tariff-based competitive bidding unless they are insulated from increase in fuel prices. "We will also try to take care of any eventuality of high coal prices," Pradhan said. On the demand from power producers for revision of tariff for ultra mega power projects, Pradhan said, "it is a state issue and should be resolved by the states and the producers. But if they approach us only then we will look into
the matter." The secretary also said coal production by Coal India will remain flat or even lower than last year. "We will have to do with less amount of coal. This may
lead to under utilisation of capacities and some may even lie idle. Even the plant load factor of power projects are expected to come down because of it, he said. While the plant load factor of National Thermal Power Corporation (NTPC) will be around 85-87%, the average PLF of all the projects would be around 77%. On achieving the 12th Plan target of adding 62,000 mw Pradhan said, "we have already added 42,000 mw capacity and we are hopeful of another 20,000 mw this year. We will try to meet our target for the year."