UMPP bidding norms could be tightened

The government is planning to tighten the bidding norms for ultra mega power projects UMPPs to prevent developers from evading penal charges for delays. The power ministry is set to make key changes in the performance guarantee norms for UMPP developers with this objective,according to official sources.

Developers are required to pay liquidated damages in case of delays on their part in implementing UMPPs. However,vague wording in contractual provisions provides a perfect escape route to developers to evade payment of liquidated damages. This could be done by invoking clauses like force majeure,which provides for reprieve on matters beyond ones control.

According to sources,the ministry has hired US-based KL Gates and Indias Fox amp; Mandal to suggest the necessary changes in bidding norms.

Meanwhile,the government has asked Power Finance Corporation PFC,the nodal agency for supervising preparations for the award of UMPPs,to go ahead with its plan to issue requests for qualification RFQs for the two upcoming UMPPsAkaltara in Chhattisgarh and Bedabahal in Orissabased on the existing model tender document,pending agreement over how the norms are to be revised. The government was supposed to incorporate suggestions received from the legal consultants into the existing model tender documents for the UMPPs.