The Bihar government is calling for bids from private power developers for three coal-based power projects in that state with a total capacity of around 4,000 megawatts.
Each thermal power project will have a capacity of 1,320 megawatts. The projects will come at Chausa village at Buxar district, Kajra in Lakhisarai and Pirpainti in Bhagalpur. For the purpose, the Bihar State Electricity Board (BSEB) has formed a project development company: Bihar Power Infrastructure Company.
The projects, to be awarded individually, will be offered on a case-2 bid basis, and will be done by tariff-based competitive bidding. The last date for submission of bids is December 14.
In each of these projects, 1,125 megawatts of power, ie, 85 per cent of power produced will be purchased by the BSEB, while the rest can be sold to a third party. Land required for the projects — the bid documents say — has been identified and a majority of the land for each of these projects has been transferred, as per section 6 of the Land Acquisition Act.
The water required for these projects will be sourced from the Ganga.
While the electricity board has assumed the responsibility to arrange for the fuel linkage for the Buxar power, in other two projects — Lakhisarai and Pirpainti — the successful bidder gets the responsibility to arrange for the linkage. This could end up being a tough clause in current times when fuel linkage has become a problem.
“In the past,” says Kameswara Rao, executive director and India utilities head of PricewaterhouseCoopers, “bids made in this method elsewhere have not been successful. Inland power plants without coal linkage will have more complications in terms of transportation disruption besides fuel risk. The bidder does not like stacking up of risks.”
Experts say coastal power projects which come with responsibility of coal arrangement by the bidder could be economical. But otherwise, it would be tough to procure coal in the current market scenario. In the last few months, reduction in coal production of the country’s largest producer, Coal India, had already adversely affected the power sector, wherein a number of projects of state-owned and private sector projects had to reduce their plant load factors.
“Bidders for power projects already have concerns,” says a top official of a power company. “They include rising interest rates and delayed financial closures for power projects. But the main concern is with regards to fuel. If that part is uncertain, I wonder how would it be possible for companies to bid.”
