India to Revive 8-Gigawatt "Ultra Mega" Power Projects

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Researched by Industrial Info Resources India (Delhi, India)--The Government of India is planning to start a fresh bidding process for two 4,000-megawatt (MW) Ultra Mega Power Projects (UMPP) in the states of Odisha and Tamil Nadu within the next three to six months.

The government had, earlier this month, abandoned the bidding process of two ultra mega power projects and decided to set up a committee to move it forward. Alongside, the government is looking for inviting bids for two new UMPPs in Bihar and Jharkhand state.

The bids for the projects were cancelled as the private firms, which had participated in the first round of bidding for both the projects in Odisha and Tamil Nadu, withdrew their bids citing difficulties in securing finances. Financial institutions claimed that the bidding process is lopsided.

Power companies and banks are mainly resisting the government's shift from build-operate-own model to design-build-finance-operate-transfer (DBFOT) model-based bidding, where the project developer will not have ownership of the land.

For Tamil Nadu UMPP, the private companies who participated in the biddings were including Adani Power Limited (BSE: 533096) (Gandhinagar, Gujarat), CLP India Limited (Mumbai), Jindal Steel & Power Limited (BSE: 532286) (New Delhi), JSW Energy Limited (BSE: 533148) (Mumbai), Sterlite Energy Limited (Mumbai) and Tata Power Limited (BSE: 500400) (Mumbai). Of these, only four bought the Request for Proposal (RFP) document but decided not to go ahead further in the process.

Nine bidders were interested to participate in the Odisha UMPP, including Adani Power, CLP India, GMR Energy Limited (Bangalore), Jindal Steel and Power, JSW Energy and Sterlite Energy. Only the state-run NTPC Limited (BSE: 532555) (New Delhi) and NHPC Limited (BSE: 533098) (Faridabad, Haryana) were left for bidding after the private companies withdrew their participation.

The Government is planning to review the situation and set up an expert group to examine the bidding process.

So far, four UMPPs have been awarded. Of this, Sasan in the central Indian state of Madhya Pradesh, Krishnapatnam in the coastal state of Andhra Pradesh and Tilaiya in Jharkhand state have been bagged by Reliance Power Limited (BSE: 532939) (Mumbai), while Tata Power is operating the Mundra UMPP in Gujarat.

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