In order to ensure that there is no repeat of a Sasan-like episode, the Government is in the process of tightening all bid documents for ultra mega power projects (UMPPs) and plugging loopholes that prevent invalid bids from slipping through. Revised documents would also empower buyers of power — in this case states — to decide the plan of action in case the lowest bidder in rejected.These changes are based on the recommendations of the inter-ministerial group constituted by the Power Ministry after the Empowered Group of Ministers (EGoM) rejected Lanco’s bid for the Sasan project by declaring it void ab initio. Crucial among the eleven changes in the bid documents are:-• Widening the scope of misrepresentation of information (made by bidders) to include “concealment and making misleading/ wrong statement”.• If the lowest bidder is rejected for any reason, instead of directly going to the second lowest bidder, the buying agencies can ask for the “best reduced financial bids” from the remaining bidders. If required they can also annul the bid process• In order to meet the technical qualification criteria, the new bid documents would require the concerned entity to hold 26 per cent equity in a project “from the time of financial closure to the time commissioning”. This would ensure that the bidding entity is genuinely committed to the project rather than obtaining the qualification criteria through an indirect route.• A bidding entity would be allowed to put in only one bid for the project and cannot participate in any other manner, say through “parent or affiliate or ultimate parent of the bidder/ member of the bidding consortium”.• Bidders would not be allowed to furnish unconsolidated audited annual accounts for ascertaining financial strength. Instead, they would be required to furnish “consolidated audited annual accounts of the bidder”, provided that the bidder “has at least 26per cent equity in each company whose accounts are merged with the audited consolidated accounts”.• Statements related to certifying financial and technical criteria of the bidders would have to be signed by the MD/ CEO as well as the statutory auditor of the company.• Changes in consortium/ change in ownership may be permitted through the bidding process except during the 30-day period prior to the bid deadline of RfP bids.
