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Web Exclusive | July 2013

CCEA to decide on clearing bidding norms for UMPPs

The cabinet committee on economic affairs (CCEA) would soon decide on clearing the standard bidding documents for new ultra mega power projects (UMPPs) in order to expedite the implementation of such projects.

Government would invite bidding for two ultra mega power projects in Bedhabahal and Surguja in Chhattisgarh once the documents are approved.

Meanwhile, unconfirmed reports indicate that the Reserve Bank of India (RBI) allowed loans to new UMPPs to be regarded as secured debt even though the site and the plant will be owned by distribution utilities, not the winning bidder.

RBI is learnt to have taken this step after it received a request for the same from union power Minister Jyotiraditya Scindia.

According to the proposed norms, ultra mega power projects and such other location specific plants will be owned by power distribution utilities and the bidders will merely be contractors for constructing the project and operating them for 30 years.

In order to ensure viability of UMPPs, the government may allow tariff revision in line with the prevailing price of coal.

Further, the government may prohibit non-core sector firms from bidding and restrict offloading of equity by the company that is awarded the project.

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