Fourth bidder gets nod,HP says no option in recession

Larsen & Toubro,which has also been earlier allotted the Sach-Khasi 149 MW project in the same basin after it matched the bid quoted by the highest bidder,has now also been allotted the Reoli-Dugli project.

As per documents available with The Indian Express,the company had agreed to match the free power share bid quoted by the second highest bidder (H2),instead of the first highest (H1).

Under the amended power policy,bidders are required to pay an upfront premium of Rs 20 lakh per MW,besides offering free power share to the state government in addition to 12 per cent already available with the government from the hydroprojects in Himachal Pradesh.

In case of the Reoli-Dugli project,after highest bidder Moser Baer,that quoted free power share of 14.4 per cent,backed out from the price quoted,the second highest bidder Jindal Steel and Power Limited (12.9 per cent ) also refused to confirm the bid.

Interestingly,the government chose H4 (L&T),which had matched the H2 bid and not H1. L&T had offered nearly 10 per cent free power share.

A promoter of a leading power company,which was also eyeing the project,said the difference in free power share between H1 and H2 was 1.51 percent,which if counted for the next 40 years will cause the government a revenue loss of crores.

“The government should have gone for fresh bidding as the project was of mega scale. Even one per cent of free power share can cause the government a huge loss,” said a senior HPSEB engineer.

State Chief Secretary Asha Swaroop said,“The decision to invite H4 to match H2 was taken by the state cabinet after taking into account all factors. It is within the norms of the power policy.”

“Most projects located on the Chenab basins are difficult to execute. The area also has a limited working period. The bidding was done when country was facing recession,hence many companies were not in a position to stick to the bids or pay upfront premium despite extentions. We did give an option to the H2 to match H1 bids,but this did not materialise. Then the government realised that there was no major difference between the power share offered by both the companies,” she said.

Just a month ago,the state government had faced severe indictment by the High Court,which quashed the allotment of the 960 MW Jangi Thopan Powari project noting that the allotment was made arbitrarily.