NTPC the only bidder for Tamil Nadu UMPP

State-owned power generation giant NTPC has emerged as the only bidder for the Cheyyur Ultra Mega Power Project (UMPP) in Tamil Nadu. The other seven potential bidders, all from the private sector, withdrew from the race citing regulatory issues in the bidding format.

The 4,000-Mw Cheyyur UMPP, worth Rs 25,000 crore, is to be fuelled with imported coal. Among the private players in the fray were Adani Power, CLP India, Jindal Steel & power, JSW Energy, Sterlite Energy and Tata Power. Of these, the only four that had bought the ‘request for proposal’ document also decided not to go further in the bidding process.

In earlier communications with the power ministry, the Association of Power Producers (APP) — of which the companies named above are part — had raised concerns over the (Design, Build, Finance, Operate, and Transfer) DBFOT model for the UMPP, and threatened it would not invest in the mega plan.

“To allay the stakeholders’ apprehensions, we will highly appreciate if you could consider coming out with a framework that serves the development aspect more predictably, and facilitating comprehensive review of Case-I and -II DBFOT documents. Until then, it will be appropriate not to proceed with competitive bidding of UMPPs,” APP had said in its letter to Power Minister Piyush Goyal.

The letter had also mentioned the companies would not be in a position to give viable and competitive plans if the concerns were not resolved satisfactorily.

“DBFOT does not apportion risk equitably. All losses go to the power generator and gains to the procurer, leaving the power producer as a contractor,” an APP official said.

Officials close to the development said any further action or statement would be issued by the government or government bodies when the minister was apprised on the matter. Power Finance Corporation executed the bidding process.

Of the 16 UMPPs the previous central government planned to set up, four have been awarded — three are operated by Reliance Power (in Sasan, Tilayiya and Krishnapatnam) and one by Tata Power (Mundra). These projects had been awarded on a competitive tariff-based bidding and executed by a special-purpose vehicle.

NTPC Limited