IOCL tweaks tender norms for maiden green hydrogen plant, but what are the revisions? MC Explains

Last month. Indian Oil re-issued tenders for its inaugural green hydrogen plant.

On February 21, 2024, Indian Oil Co Ltd (IOCL) cancelled tenders for its inaugural green hydrogen plant to be set up in Panipat, Haryana, after potential bidders approached a court, alleging a conflict of interest.

The Independent Green Hydrogen Producers Association, comprising six renewable energy firms, filed a petition in the Delhi High Court, alleging that IOCL "tailored" tender norms to favour a joint venture involving the state-owned refiner.

The legal dispute prompted IOCL to reissue the tender in March, removing the controversial ROFR (Right of first refusal) clause. However, potential bidders said that IOCL also introduced changes to the eligibility criteria, making it difficult for them to place bids.

The revised tender restricts bidding to Indian entities, and allows sole bidders or those forming a consortium with specific stakeholders (e.g., parent company, affiliates) . The earlier tender allowed both Indian and foreign entities to bid.

A bidder participating via a consortium or joint venture should have a minimum stake ownership. The revised tender outlines that each member/partner in a consortium or JV must hold a minimum stake of 26 percent . The initial tender did not specify any such condition.

The new tender outlines specific capacity criteria for various sectors, which qualifies the bidder's experience in hydrogen-handling facilities. For example, it specifies the bidders should have handled hydrogen facilities of a refinery unit, or petrochemical unit or fertiliser unit, with a minimum capacity of 500 Kilo Tonnes Per Annum (KTPA).

The old tender mandated a minimum capacity requirement of 5 KTPA.

The new tender does not explicitly mention the option for bidders to purchase renewable power from government agencies, unlike the earlier one. The eariler one allowed them to do so during the contractual period.

The revised tender's financial criteria require the bidder or consortium/JV members to have a minimum average annual turnover of Rs 260 crore or $31.1 million. The now-cancelled tender, however, had set a slightly lower minimum combined annual turnover requirement of Rs 245 crore or approximately $29 million.

Bidders now require a minimum average net worth, with a specific threshold of Rs 150 crore or $18 million. This was not specified in the earlier tender, which only required a positive net worth.