Telangana awards three power projects to BHEL on nomination basis

MUMBAI | HYDERABAD: The K C Rao - led Telangana government has awarded the turnkey contract of three power projects - adding up to 6,000 MW capacity and to be built at a cost of Rs 27,360 crore ($4.3 billion) - in the state to government-owned power equipment manufacturer Bharat Heavy Electricals (Bhel) on nomination basis, without floating a mandatory competitive bid.

What's more, it has also taken an in-principle decision to award all upcoming power projects to the government firm on a nomination basis, without calling for competitive bids.

The move has raised eyebrows of private equipment manufacturers such as Alstom, Bharat Forge, Larsen and Toubro, Toshiba-JSW, among others, which are likely to approach the competition watchdog - Competition Commission of India (CCI). They are worried given that the newly formed Telangana state is likely to award projects worth Rs 90,500 crore to raise its electricity capacity from 4,320 MW to 25,000 MW in the next four years.

Justifying the Telangana government's decision to award power projects to a central public sector undertaking (CPSU), state industries and energy secretary Arvind Kumar told TOI, "Telangana state inherited a massive power deficit situation at the time of its formation on June 2, 2014.

Realizing that self sufficiency in power is a precondition for any infrastructure development, the state government, to overcome the deficit in power in the shortest possible time and to achieve self-sufficiency in power generation and in view of the fact that it was to be between a state PSU (TSGENCO) and GOI PSU (Bhel), took a conscious decision to award all upcoming state power projects on a nomination basis to a government-owned PSU."

Justifying the price, Kumar said the price discovery by Telangana Power Generation Corporation (TSGENCO) along with Bhel was based on some of the most competitive contemporary power projects of similar size elsewhere.

BHEL