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Rediff.com  » Business » AP's mega power project gets only 3 bids

AP's mega power project gets only 3 bids

October 25, 2007 10:11 IST
The proposed Krishnapatnam ultra mega power project - the third 4,000 Mw project to go under the government's hammer - has attracted just three bids from Sterlite, Reliance Power and Larsen & Toubro, though there were nine qualified bidders for the project.

Krishnapatnam is a coastal project in Andhra Pradesh that will rely on imported coal. The only other comparable ultra mega coastal project is the recently awarded Mundra power project, which had received six bids. The Sasan project had received nine bids.

Those who have not bid after expressing an interest include Essar Power, NTPC, Japan's Sumitomo Corporation, China Light and Power (with GMR) Israel Electric Company (with DS Construction) and Tata Power.

Union Power Secretary Anil Razdan called the response "reasonable, in the given situation," when there has been a sharp appreciation in the price of coal, compared to what it was when bids for the last ultra mega power projects were invited.

The government could have managed more bids if it had agreed to "last-minute" requests for postponing the bid submission deadline.

RV Shahi, former power secretary and architect of the ultra mega power project scheme, felt that "three serious bids for such a large investment was not a small thing". These projects involve an investment of Rs 16,000 crore (Rs 160 billion) to Rs 18,000 crore (Rs 180 billion).

The next few days will be spent in vetting the bids (in what is called a responsiveness check), following which the price-bids of those who cleared the vetting will be opened to determine the winner, said officials associated with the process.

"The target date of opening the price bids is November 13," said an official of the Power Finance Corporation, the nodal agency for these projects.

According to the original schedule, the project should have gone to the private sector developer by March this year.

Coastal Andhra Power Ltd is the shell company floated by PFC to house the project, which will sell power to Andhra, Karnataka, Maharashtra and Tamil Nadu.

Meanwhile, the government is readying to invite bids for the next (the fourth) ultra mega power project at Tilaiya in Jharkhand, said Razdan.

BS Reporter in New Delhi
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