Centre invites comments on revised bid document for BOO power projects

After the fiasco over bidding for new ultra mega power projects (UMPPs) and power projects based on domestic coal supply, the ministry of power has come out with new standard/model bidding documents, request for qualification (RFQ), request for proposal (RFP), power purchase agreement (PPA) and guidelines. These will be applicable for power projects to be developed on a build-own-operate (BOO) basis. The ministry has sought views from stakeholders till September 1.

According to the bid documents and guidelines, the RFQ will be issued in 75 days, submission of RFP to be done in 225 days, and evaluation of bids and issue of letter of approval (LOA) in 240 days. Two special purpose vehicles (SPVs), namely the operating SPV and the infrastructure SPV, will be incorporated by the nodal agency.

In 300 days, there will be transfer of infra SPV to procurers and execution of share purchase agreement, default escrow agreement and the agreement to hypothecate-cum-deed of hypothecation, land lease agreement for critical land and land lease agreement.

Deloitte Touche Tohmatsu India’s senior director (consulting) Debasish Mishra told Business Standard, “These bid documents have given the flexibility to the bidder to quote fixed costs for each year of the contract period, and variable cost for the first year would be escalated according to the inflationary index published by the regulator. This is good system of balancing risk on the fuel side and reward efficiency in project execution and financing.”

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