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Web Exclusive | October 2012

Ministry told to bring changes in power plants' bidding

The Central Electricity Regulatory Commission (CERC), has asked the Union Power Ministry to make necessary changes in bidding documents for upcoming power plants to address issues faced by distribution companies.

In a letter to Power Ministry, Central Electricity Regulatory Commission (CERC) has said that the document needs refinement to adequately address various issues around competitive procurement of power by the distribution licensees.

The Commission is of the view that the Standard Bidding Document or SBD should be designed based on Build, Own, Operate (BOO) model instead of Design, Build, Finance, Operate and Transfer (DBFOT) as it is the case right now.

DBFOT or Public, Private, Partnership model in power generation, is premised on the assumption that the distribution licensee will be a public entity and generator will be a private entity.

This may not be a correct assumption as there are private distribution licensees in the country, CERC said. CERC also said that the provision of independent engineer should be dispensed with. Ideally both the contracting parties should be jointly involved to undertake measurement and monitoring of project.

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