Eligibility norms for UMPPs relaxed

New Delhi, Oct 15:

The government today eased eligibility norms for companies that plan to bid for the proposed ultra mega power projects (UMPPs) in Odisha and Tamil Nadu by relaxing the capital cost and expenditure requirements.

“The total capital cost requirement, in order to qualify for setting up the plant, has been brought down to 5% and keeping the economic slowdown in mind, the expenditure incurred by the companies on projects in the past seven years will be counted,” Power Ministry Additional Secretary Ashok Lavasa told reporters here.

The capital cost requirement was previously 10% of the project cost. Each UMPP, which has a capacity of 4,000 megawatts, is estimated to cost Rs 25,000 crore.

The duration in the clause on expenditure has been extended to seven years from five years after getting feedback from prospective bidders, Lavasa said.

“The inter-ministerial group said that there has been a slowdown in the economy. In order to make the ground equal for everyone, we will expand it from five to seven years. All it means is that more people can compete,” Lavasa said.

The Cheyyur UMPP in Tamil Nadu is based on imported coal while the Odisha project will use domestic coal.

“The total fuel cost of the project will be finalised at theRequest for Proposal (RFP) stage instead of the Request for Qualification (RFQ) because at that stage the companies would have made up their minds about how to move forward,” he said.

State-owned Power Finance Corporation (PFC), the nodal agency for the UMPP projects, last month floated tenders inviting initial bids for the Tamil Nadu and Odisha plants. The last date for submission of RFQs for both projects is November 11.

Of the four UMPPs allotted so far, Sasan in Madhya Pradesh, Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand have been bagged by Reliance Power. Tata Power has commissioned the Mundra plant in Gujarat. (PTI)