After 10 months of wait and repeated biddings,the Uttar Pradesh government has finally handed over the 1,320 MW Karchhana thermal power project to JayPee Associates following a decision taken on Thursday night. The project,combined with the proposed Bara thermal power project,is expected to generate 3,300 MW of power.
The project has been in the eye of storm ever since the bidding process was started in April last,in which Lanco Infratech emerged as the lowest bidder at Rs 2.83 per unit. However,the company did not get the project as the government found the bid not suitable.
Expecting further reduction in the rate,the government decided to go ahead with a re-bidding. Subsequently,Reliance Energy came out as the lowest bidder in June at Rs 2.60 per unit. However,this bid was also cancelled and the government ordered a fresh global tendering. The argument was that despite being the lowest of all the bidders,the Reliance bid was on the higher end.
Offering some sweeteners to the companies,the government then drafted a new energy policy making the project more viable. It gave the private investors freedom to increase the capacity of the powerhouse from that of the sanctioned one and sell as much as 80 per cent power generated through the additional units in the open market.
However,the lowest bid received in November last was by the Jaypee Associates,which quoted Rs the rate of 2.97,higher than what was quoted by other companies in the earlier bids.
The government justified the higher rate quoted by JayPee to economic slowdown and delayed its decision on Karchhana anticipating the bids for 4,000 MW Tilaiya project in Jharkhand to be higher than the rates quoted by JayPee for Karchhana. However,the Reliance got the project after quoting the rate of Rs 1.77 per unit.