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UMPP: major changes in policy norms cleared

NEW DELHI: The Empowered Group of Ministers (EGoM) on Power headed by Union Power Minister Sushil Kumar Shinde has approved some major changes in the policy guidelines suggested by the Inter-Ministerial Group (IMG) relating to ultra mega power projects (UMPP), including allowing expansion beyond 4,000 MW capacity and usage of allocated coal and land for the same purpose.

The new guidelines, likely to be implemented for the pending seven UMPPs, state that the existing power purchase agreement (PPA) signers will not have any claim over the additional capacity if and when added by the existing unit.

Experts were of the opinion that the modifications to the UMPP bidding document and changes in the policy guidelines would benefit both Reliance Energy Limited, which has bagged the Sasan UMPP in Madhya Pradesh and Tata Power, which has bagged the Mundra UMPP in Gujarat. With the allocation of dedicated coal blocks, Reliance Energy is particularly going to be the key beneficiary as it is now allowed to utilise land and raw material for the expanded capacity.

The EGoM also gave approval to the IMG recommendation that tariff for additional capacity will be as per applicable law.

The IMG was set up on July 30 to review the Standard Bid Documents (SBDs) which were used for preparing the documents in respect of the UMPPs to determine any modifications required in the bidding documents at the RFQ (Request for Quotation) and RFP (Request for Proposal) stages, particularly, in view of the recent trends of merge and acquisitions, and also to obviate any chance of misrepresentation in the course of bidding.

The EGoM also ratified the recommendation of IMG on the issue of restrictions on participating in more than one bids stating that every bidder should be required to furnish disclosure statement on not having any conflict of interest and furnishing details regarding its relationship, if any, with other bidders.

On the claim of procurers on generation of additional power beyond the contracted capacity, the EGoM decided that there was no need for putting any restrictive clauses in the bid documents. It also approved the recommendations that the present requirement capacity lock-in of the lead member of the consortium till 12 years be reduced to five years after the commissioning of the power station.

It further directed that pre-qualified bidders for the Krishnapatnam UMPP be given revised RFP.

For the Tilaiya UMPP, the RFQ be issued afresh after incorporating the proposed changes.

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