Millennium Post

‘Cabinet likely to approve UMPP bid paper soon’

The Union Cabinet is likely to give green signal soon to standard bid document which will facilitate auctioning of domestic coal-based four or five Ultra Mega Power Projects, entailing an investment of Rs 30,000 crore each.

Cabinet clearance will enable auctioning of the UMPP projects in the current fiscal which include Banka in Bihar and Tilaiya in Jharkhand. “We have already taken out the documents for Cabinet approval. They may come up this week or the next week,” Power Minister Piyush Goyal said during his recent visit to the United States.

Simultaneously, “we are in dialogue” with several states where UMPPs have to be bid out, he said.

“The Tilayea UMPP in Jharkhand has to be bid out again. The Banka UMPP in Bihar has to be bid out. There is a project in Andhra Pradesh that would also be bid out. I think there would be one in Cheyyur in Tamil Nadu. Four or five are anvil,” the Minister said. The Power Ministry is also in the process of finalising the standard bid document for imported coal-based UMPPs. Once that is done, UMPPs like Cheyyur in Tamil Nadu can go under hammer.

Earlier, the bid document for domestic coal could not be put up before the Cabinet due to some legal glitch. Government had planned to float tenders for three UMPPs in 2015-16.

In the 2015 Budget speech, Finance Minister Arun Jaitley had said the government propose to set up five new UMPPs of 4,000 mw each, in the plug-and-play mode. All clearances and linkages would 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, Jaitley had said.

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

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. In the case of Tilaiya UMPP, all power procurers have signed the termination notice served by Reliance Power to end the contract for the project. Reliance Power, in August 2009, had won rights to set up a 3,960-mw power plant at Hazaribagh in Jharkhand after bidding a levelised 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. 
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