PTC changes short-listing norms

NEW DELHI, AUG 25: In a major change in strategy, the newly formed Power Trading Corporation PTC has decided to short-list all 13 applicants who had applied for the Requests for Qualification RFQ for setting up the 2000-mw Pipavav mega power project at the cost of Rs 8,000 crore. In the second stage these companies will now be required to submit tariff bids 8212; the company bidding the lowest tariff for power generation would be awarded the project.

The short-listed companies include SIPA, Reliance, Enron, BSES consortium, Lamp;T consortium, British Gas and Tata Electric among others. Earlier, it had been decided that five companies from the list of 13 who had applied, would be selected to bid for tariffs for the Pipavav project. A decision to change the short-listing procedure at the RFQ stage was taken at the meeting of the Standing Independent Group SIG meeting held here yesterday. The SIG, headed by Justice P N Bhagwati, decided that inviting all 13 would keep the pressure on pushing the power tariffsbid by these companies more successfully than if five were allowed to bid for mega power projects. As per the latest Government definition, mega power projects are those which would generate more than 1,000 mw power and supply to more than one state.

The Government had changed tracks last year in the selection of private power companies for setting up power projects based on whichever company was able to generate power at the lowest tariff. Subsequently, the SIG was set up to formulate the procedure for inviting bids for these private power projects. The SIG then appointed three consultants to advise them on the route to be followed to decide finalists for the projects. Following advise from these consultants 8212; Lahmeyer International technical consultants, Dresdner Kleinworth financial consultants and Freshfields legal consultants 8212; the RFQs were readied by the SIG based on which these were floated by the Power Grid Corporation Ltd PGCIL on behalf of PTC for the Pipavav project in March. Earlierthis year, 27 companies had taken the RFQs with only 13 filing their replies.

The Pipavav project is extremely important for the PTC which was recently incorporated by the Government as the single window which would buy power from mega projects and sell this to various states on a strictly commercial basis. Pipavav, in Gujarat, is the first mega project being evaluated by the PTC which will include selection of companies for setting up the mega power project.