PFC tightens eligibility norms for ultra mega projects

In what seems like a tacit admission of loopholes in the bidding process for the 4,000 Mw Sasan ultra mega power project, the Power Finance Corporation (PFC) has tightened the eligibility criteria for prospective bidders for the next such project in Jharkhand.

PFC, the nodal agency for implementing the ultra mega power projects, has modified the RFQ (request for qualification) document to ensure that the bidder mentions the equity that was held in the (completed) project, on the basis of which it wants to qualify for the bid.

According to the new terms, "The bidder has to furnish the equity percentage held at the time of the completion of the project. The bidder will have to submit documentary evidence in support of equity in excess of 26 per cent."

PFC, along with its consultants Ernst and Young, has been in the line of fire for ambiguity in the bid process, which saw Lanco Infratech bag the right to build the Rs 16,000 crore Sasan plant while Tata Power won the bid to build a plant of similar size at Mundra in Gujarat.

Official sources, however, denied that the change in the criteria was a result of the controversy over Sasan.

The controversy arose after the winning consortium of Lanco-Globeleq saw the exit of Globeleq, which was replaced by Jindal Steel and Power. The change of ownership is in question, as is the alleged misrepresentation of the facts in the bid documents.

Sources denied any move to replace the consultants Ernst and Young or any plan to take on an additional consultant to ensure that there were no loopholes in the bidding for the other ultra mega projects in the pipeline.

"We will continue with E&Y for the next two projects at least, Jharkhand and Krishnapatnam (in Andhra)," a senior PFC official said.