Power Cos Taking Projects On Their Balance Sheets May Not Have To Follow 26% Equity Rule

THE government plans to relax entry norms for ultra mega power projects (UMPPs) to ensure wider participation,as it struggles to meet power generation targets set for the Eleventh Five Year Plan period.

It has proposed to modify a clause in the standard bidding document for UMPPs that requires a bidding firm to hold at least 26% stake in an up and running project,with a capital cost not less than Rs 3,000 crore,to ensure participation of companies such as NTPC,which take up large power projects on their balance sheets.The 26% norm will be applicable for companies that route their investment through special purpose vehicles.

The changes in bid document is more on the lines of a clarification.Anybody could raise technical issues had NTPC won any of the previous UMPP bids, said a power ministry official,who asked not to be named.

The ministry,however,proposes to tighten the performance norms for large projects by retaining bid bond submitted by the successful company till the end of the 25-year power purchase agreement signed with state distribution utilities.

The technical qualifying criteria for UMPPs,followed in the case of all four UMPPs bid out so far,sti...