India may change bidding rules for new projects

India may change bidding rules for new 4,000 Mw power projects to allow companies to adjust tariffs in case a change in regulations makes fuel imports costlier.

According to power secretary P Uma Shankar, there are plans to ramp up its power generation capacity by giving out contracts for large projects to companies that quote the lowest tariff for selling electricity while meeting other criteria.

These are typically 4,000 Mw projects commonly called ultra mega power projects.

Two such projects, which were to be run on imported coal, were affected due to Indonesia’s plan to change its coal pricing rules. The law will make coal imports from Indonesia more expensive.

Reliance Power Ltd’s project at Krishnapatnam in the southern state of Andhra Pradesh has been affected as it is unable to draw funds due to the new rules, said state minister for power KC Venugopal said in August.

Tata Power Ltd, which is building a 4,000 Mw project in Mundra in Gujarat state, may be “adopting a go-slow” approach as the new rules in Indonesia may have affected the project’s viability.

Shankar didn’t say whether changes will be made to the agreements for these two projects. “Two meetings have been held with stakeholders to prepare future bid documents for such projects,” he added. India plans to build 16 ultra mega projects, including four that have already been awarded.