BIHAR ELECTRICITY REGULATORY COMMISSION
Vidyut Bhawan-II, Bailey Road, Patna – 800 021
Case No. 06/2012
IN THE MATTER OF :
Petition under section 63 of the Electricity Act, 2003 for
approval and adoption of Tariff for procurement of Base Load
Power 560 MW (Essar-300 MW & GMR-260 MW) on Long Term
Basis under case-1 route of Tariff based on Competitive Bidding
Guidelines of Ministry of Power, Government of India.
And
Bihar State Electricity Board
Vidyut Bhawan, Jawahar Lal Nehru Marg,
Bailey Road, Patna-800021
…..………. Petitioner
Present:
1. Sri U. N. Panjiar
-
Chairman
2. Sri S. C. Jha
-
Member
3. Sri K. P. Singh
-
Member
Appearance on behalf of Petitioner, BSEB
1. Mr. Rakesh, EEE(Inter-state)
Bihar State Electricity Board
Order
1.
Dated 27.11.2012
It is a petition filed by the petitioner Bihar State Electricity Board
(hereinafter referred to as ‘BSEB’ or ‘petitioner’) under the provision
of section 63 of the Electricity Act,2003 (hereinafter referred to as
‘Act’) for approval and adoption of tariff for procurement of 560 MW
of power on tariff based competitive bidding in accordance with the
“Guidelines for Determination of Tariff by Bidding
Procurement of power
process for
by Distribution Licensees”(hereinafter
referred as ‘Competitive Bidding Guidelines’ or Guidelines) issued by
1
the Central Government vide resolution no.23/11/2004 –R&R(vol.II) as amended from time to time.
2.
Submission in the Petition
In its petition dated 13.02.2012, the BSEB has made following
submissions :(i)
The Bihar State Electricity Board (hereinafter referred to as ‘BSEB’
or ‘petitioner’), an autonomous body constituted under section 5 of
Electricity Supply Act, 1948 duly formed by Government of Bihar
under legislative decree having its head office at Vidyut Bhawan,
Jawaharlal Nehru Marg, Patna-800021.
(ii)
The Bihar Electricity Regulatory Commission (hereinafter referred to
as Commission or BERC) vide its tariff order dated 06.12.2010
passed in Case no. TP-3 of 2010 pertaining to Determination of ARR
and Retail tariff for the financial year 2010-11 of BSEB had under
directive-25 (4) has
directed BSEB to initiate bidding process for
1050 MW (1500 MW-450 MW) power without any delay. The issue
was also discussed in the review meeting taken up by the Chief
Minister, Bihar. In compliance of the directive of the BERC and
subsequent direction of Govt. of Bihar, BSEB initiated bidding
process for long term (25 years) under Case-I based on the standard
bidding documents and guidelines issued by Ministry of Power,
Govt. of India vide resolution dated 19th January, 2005 and its
amendment time to time without any deviation.
(iii)
Earlier, the Commission vide its letter no. BERC-Misc-1/08-250
dated 21.07.2010 has noted that BSEB intend to procure 1500 MW
power under Case-I Standard bidding document based on the
guidelines issued by Ministry of Power, Govt. of India without any
deviation. BSEB also vide its letter no. 113 dated 14.01.2011 had
informed BERC under provision of Clause 3.1 (i) of the Guidelines
2
for Determination of Tariff by Bidding process for procurement of
power by Distribution Licensees issued by Ministry of Power, Govt.
of India about the procurement of 1050 MW± 20% power at delivery
point through competitive bidding process under Case-I. BERC vide
its letter no. BERC-Misc.-1/08 (Part)-36 dated 21.01.2011 had
informed BSEB that Commission has no objection to the proposal of
BSEB to go ahead for procurement of
1050 MW± 20% power at
through competitive bidding process under Case-I. The procurement
process should be through transparent process of bidding and in
accordance with the guidelines issued by Ministry of Power, Govt. of
India as amended from time to time.
(iv)
It is also essential to mention that procurement of 1050 MW± 20%
power by BSEB is part of the 1500 MW± 20% power for which BSEB
had initially issued NIT no. 212/PR/BSEB/2009 for procurement
wanted through tariff based bidding process under Case-I for long
term and Commission vide letter no. 250 dated 21.07.2010 had
already communicated to BSEB that procurement of 1500 MW
power by BSEB through tariff based bidding process under Case-I
for long term was noted by BERC. Further, it may not be out of
place to mention that BSEB against the tender notice NIT no.
212/PR/BSEB/2009 for procurement of 1500 MW± 20% power,
BSEB had contracted 450 MW power from Essar Power(Jharkhand)
Limited (L1 bidder). Hon’ble BERC vide its order dated 01.02.2012
passed in case no. 08/2011 had adopted the levellised tariff of Rs.
3.057 per KWh and also the year-wise tariff for which PPA has been
signed for procurement of 450 MW power.
(v)
BERC vide para 12 of the tariff order dated 01.02.2012 passed in
Case no. 08/2011 had also noted the justification given by BSEB for
procurement of 1500 MW power through competitive bidding
process under Case-I for long term.
3
(vi)
The petitioner issued the advertisement “Notice Inviting Tender” NIT
No. 02/PR/BSEB/2011 on 14.01.2011 for the procurement of
balance 1050 MW± 20% power at delivery point through competitive
bidding
process
under
Case-1
route
of
the
‘Guidelines
for
Determination of Tariff by Bidding Process for procurement of power
by Distribution Licensees” as issued by Ministry of Power, Govt. of
India on 19.01.2005 and its amendments from time to time
(hereinafter referred to as the “Competitive Bidding Guidelines” or
“CBG”). The bid documents were made available for download on
BSEB
website
http://bseb.bih.nic.in
from
20.01.2011
to
03.02.2011. The single stage bidding documents were prepared in
line with the Standard Bid Documents (Case 1) issued by Ministry of
Power, Govt. of India on 21st July 2010, without any deviation. The
pre-bid meeting for the clarification of the queries raised by the
bidders was held on 11.02.2011. The RfP documents, along with the
reply to the queries raised by the bidders, were uploaded on BSEB’s
website http://bseb.bih.nic.in on 22.02.2011, with submission of
bids being 04.04.2011 till 1:00 p.m., providing sufficient time of 45
days to all the bidders in compliance with Clause 5.5 of the tariff
based competitive bidding guidelines issued 21st July 2010.
(vii)
The petitioner constituted a Bid Evaluation Committee (BEC) in
compliance with Clause 5.9 of CBG. The BEC comprised of the
following members with one independent/external member :
Sl.No. Name of the person
Position
1.
Shri R. P. Choudhary
Coordinator
Chief Engineer ,Transmission (O & M), BSEB
2.
Shri Hemant Kumar
External Member
Chief
Manager,
Rural
Electrification
Corporation, Patna
3.
Shri A. K. Sinha
Member
BSE (Interstate), BSEB
4.
Shri P. R. Sinha
Member
4
5.
6.
ESE (APDRP), BSEB
Shri Rakesh
Electrical Executive Engineer
BSEB
Shri N. K. Jha
Director (Expenditure), BSEB
(Interstate),
Member
Member
(viii) The petitioner submits that, Eight (8) bidders (i.e. twelve nos. of Non
Financial Bids as two trading licensees M/s PTC India Ltd. and M/s
National Energy & Trading Services Ltd. (NETS) has tied up four and
three developers respectively) have submitted their bids of varying
capacities against NIT No. 02/PR/BSEB/2011, dated 14.01.2011
and the Non-Financial-Bids were opened as per the schedule date
i.e. 04.04.2011 and time i.e. 1500 hrs (IST). The list of the bidders
and the capacity offered is listed below :
Sl.
No
Bidders name
Nature
of
the bidder
Quantum of
power
offered
260 MW
Fuel
Location of Power
Source
1
GMR
Energy
Kamalanga
Bidding
company
Coal
Bidding
company
1050 MW
Coal
Bidding
company
650 MW
Coal
1050 MW Thermal
Power
Project,
Village- Kamalanga,
District-Dhenkanal,
Orissa
1350 MW Amravati
Thermal
Power
Project
(Phase
II)
Nandgaonpeth,
District-Amravati,
Maharastra
1.2x350 MW Thermal
Power
Plant
at
Sahajbhal, DistrictJharsuguda, Orissa
2.
2x350
MW
Thermal Power Plant
at
Kandarei,
Athagarh,
DistrictCuttack, Orissa.
3.
2x600
MW
Thermal Power Plant
at Jangir, DistrictChampa, CG
4.
2X600
MW
Thermal Power Plant
at District Anupur,
State-MP
2.
Indiabulls Power Ltd.
3.
PTC India Ltd.
 Trading
Company
Thru:
1. Ind-Barath
Energy
(Utkal)
Ltd.
2. KVK
Nilanchal
Power Pvt. Ltd.
3. DB Power Ltd.
4. MB Power (MP)
Ltd.
5
4.
Essar Power Ltd.
Bidding
company
300 MW
Coal
5.
Reliance Power Ltd.
Bidding
company
1050 MW
Natur
al
Gas
6.
National
Energy
Trading & Services
Ltd.
 Trading Company
Thru:
1. Lanco Vedarbha
Thermal
power
Ltd.
2. Lanco Power Ltd.
3. Lanco Babandh
Power Ltd.
Bidding
company
740MW
Coal
7.
Jaypee
Ventures Ltd.
power
Bidding
company
100 MW
Coal
8.
Shapoorji
Pallonji
Energy (Gujrat) Pvt.
Ltd.
Bidding
company
255 MW
Coal
(ix)
TehsilChandwa,
DistrictLatehar,
State- Jharkhand
2400 MW Samalkot
Power
Project,
at
Area
(IDA)
Peddapuram,
Industrial
Estate,
Mandal
Samalkot,
Dist. East Godwari,
AP
1.
2x660
MW
Thermal Power Plant
at Mandava, District
Wardha,
Maharashtra
2.
4x660
MW
Thermal Power Plant
at Village Pathadi,
District
Korba,
Chattishgarh.
3.
2x660
MW
Thermal Power Plant
at Village Kurunti/
Kharagprasad,
District-Dhenkanal,
Orissa
2x660 MW Thermal
Plant
at
Village
Nigrie,
DistrictSingrauli, State MP.
2x660 MW Thermal
Plant at Village Kaj &
Nanwada
DistrictJunagadh, Gujrat
The evaluation of the Non financial Bids was carried out by M/s
Bihar Power Infrastructure Company Pvt. Ltd., the Bid Process
Management consultant (hereinafter referred to as ‘Consultant’)
engaged by the petitioner. During the bid evaluation process, BSEB
sent written requests to the select bidders to submit certain
clarifications in accordance with the Clause 2.5 (g) of the RfP. The
last date for the submission of responses to the clarifications sought
by BSEB was prescribed as 26.04.2011 which was further extended
till 29.04.2011. The responses to the queries from the bidders were
received by BSEB in due time. As it look considerable time, the date
6
of opening of the financial bids was extended till 09.05.2011. The
bidders were accordingly informed on 16.04.2011 through email, fax
and (BSEB) website notice.
(x)
Based on the submission of the bids by the Bidders, a detailed Non
financial Bid Evaluation report (Annexure I) was submitted to Bid
Evaluation Committee by the BSEB. There were certain minor
deficiencies and non compliances of the provisions of RfP in the
Non-financial bids of 6 bidders. A detailed agenda on the nonfinancial bids evaluation was circulated to the members of the
Central Purchase Committee (CPC) of BSEB. The CPC, vide its
meeting no. 07/2011 dated 17.05.2011 recommended qualifying 7
bidders, except M/s Shapoorji Pallonji Energy (Gujrat) Pvt. Ltd.
Subsequently, the matter was placed before the BSEB Board. The
Board considered the recommendation of the CPC on approving the
minor deficiencies and non compliances and approved qualifying
seven (7) bidders, except M/s Shapoorji Pallonji Energy (Gujrat) Pvt.
Ltd. vide its resolution no. 8608 in the 540th Board meeting held on
16.06.2011 (Annexure-II), subject to submission of sworn in
affidavits to comply with the conditions imposed by BSEB.
(xi)
Based on the submissions to queries, affidavits and original
document verification of the qualified bidders, the seven financial
bids of the qualifying bidders were opened on 28.06.2011 in the light
of the approval accorded in the Board and in presence of the
bidders’ authorized representatives. The summary of the levelized
tariff discovered in the financial bids so opened are as under :
Rank
Name of Bidder
Quantum
of power
offered
Details
of
injection point
1.
Essar Power Ltd.
300 MW
CTU 400 KV
line
pooling
station
at
Ranchi
7
Quoted
Levelised
Tariff
(Rs./KWh)
3.690
Criteria for bid
evaluation
&
payments
Power
generation
source
with
captive
coal
block
2.
Jaypee
power
Ventures Ltd.
100 MW
CTU-PGCIL
Satna
3.879
3.
National
Energy
Trading & Services
Ltd.
(Project
Developer-Lanco
Babandh
Power
Ltd.)
GMR Kamalanga
Energy Ltd.
250 MW
ER-CTU
3.902
260 MW
4.030
PTC India Ltd.
(Project DeveloperKVK
Nilanchal
Power Pvt. Ltd.)
PTC India Ltd.
(Project Developer
DB Power Ltd.)
200 MW
Angul
Pooling
Station
of
Powergrid,
Orissa
400
KV
at
Busbar located
in
Cuttack
district, Orissa
PGCIL Pooling
station
Kotra,
Chhattisgarh
PTC India Ltd.
(Project DeveloperMB Power (MP)
Ltd.
Indiabulls Power
Ltd.
200 MW
CTU
Anupur,
Madhya
Pradesh
4.411
1050 MW
CTU
Pooling
Station
near
Nagpur
4.415
PTC India Ltd.
(Project Developer
Ind
–Barath
Energy
(utkal)
Ltd.)
National
Energy
Trading & Services
Ltd.
(Project
Developer- Lanco
Power Ltd.)
National
Energy
Trading & Services
Ltd.
(Project
Developer- Lanco
Vedarbha Thermal
Power Ltd.)
Reliance
Power
Ltd.
150 MW
CTU
Pooling
station
near
Jarsugunda
4.591
120 MW
Chhatishgarh
4.954
Power
generation
source linkage
based coal
370 MW
CTU
Maharastra
5.446
Power
generation
source linkage
based coal
1050 MW
Vemagiri
Pooling Station
(PGCIL)
12.445
Power
generation
source
with
imported
gas
(RLNG)
4.
5.
6.
7.
8.
9.
10.
11.
12.
100 MW
8
4.076
4.088
Power
generation
source
with
captive
coal
block
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
Power
generation
source linkage
based coal
(xii)
M/s Essar Power (Jharkhand) Ltd. (L1) has offered 300 MW capacity
having Captive Coal Mine (Pit head Plant) at Distt-Latehar,
Jharkhand with tariff of Rupees Three Point Six Nine only (Rs.
3.690) per unit at the BSEB delivery point. The tariff is firm and not
subject to escalation except for change on account of transmission
charges and losses of Eastern Region for power injected from the
injection point to delivery point.
(xiii) The outcomes of the financial bids evaluation were placed before the
CPC for its recommendation. Considering the meager generation
capacity, high dependence of State on central allocation and rise in
the cost of power procured even through the competitive bidding
route within a span of a year, the CPC vide its meeting no. 09/2011
dated 05.07.2011 recommended the procurement of power 910 MW
from L1, L2, L3 & L4 after apprising the state government in this
regard, and subject to approval of the Board.
(xiv)
Meanwhile, considering the vailidity of the bids submitted by the
bidders till 2nd August 2011, the Petitioner vide its letter dated 30th
July 2011 requested the qualified bidders to extend the validity of
their bids for an additional period of 45 days i.e. till 16 th September
2011. The following bidders extended the validity of their bids as
requested by BSEB:
a.
b.
c.
d.
e.
(xv)
GMR Kamalanga Energy Ltd.
PTC India Ltd
Essar Power Ltd.
Reliance Power Ltd.
Jaypee Power Ventures Ltd.
The petitioner also submits that M/s Indiabulls Power Ltd. had
extended its bid by a period of 15 days only, against the Petitioner’s
request for extension of 45 days. M/s National Energy Trading &
Services Ltd. (NETS) had extended the bid only for one generation
source- Lanco Power Ltd. In case of other two project developers of
NETS, it has regretted and not extended the validity of bids.
9
(xvi)
The outcomes of the financial bids and the recommendation of the
CPC were placed before the Board of BSEB for its consideration and
approval. The Board discussed the matter in detail and took
cognizance of the facts that:
a. During the last one year period i.e, the period between the
submission of the bids in current & previous Case 1 bidding
process, the tariff has substantially increased.
b. There is now acute shortage of coal linkages for all projects. Even
the prices of imported coal have risen sharply.
c. With the experience of two Case 1 bidding procedures, it also noted
that the entire bidding process takes more than 180 days.
(xvii) Thereafter, the Board of BSEB vide resolution no. 8619 in the 541 st
Board meeting held on 04.08.2011 (Annexure-III) gave approval to
issue Lol to M/s Essar Power Ltd. (L1 bidder) for supply of 300 MW
power at the quoted levelised tariff of Rs. 3.690 per KWh and further
suggested that the L2, L4, L6, L7 may be offered an opportunity to
give their counter-offers equal to the levelized tariff of L1 bidder and
then the balance requisitioned contracted capacity may be split
among the bidders who match the levelized tariff of L1 bidder.
Accordingly, the petitioner sent letters to the bidders Jaiprakash
Ventures Pvt. Ltd., GMR Kamalanga Energy Ltd., PTC India Ltd. &
Indiabulls Power Ltd. to submit the counter-offers to match the
levelized tariff of L1. In response, M/s GMR kamalanga Energy Ltd.
submitted its counter-offer and match the levelized tariff of L1.
(xviii) Further, Board has directed that if the balance requisitioned
capacity of 960 MW is not met by the aforesaid bidder who accepts
the counter offer, the process will be repeated and counter offers will
be made to L9, L10 etc. bidders who have qualified in the evaluation
process.
10
(xix) Subsequently, the Petitioner informed the Principal Secretary,
Department of Energy, Govt. of Bihar about its intent of procuring
560 MW power from the bidders M/s Essar Power (Jharkhand) Ltd.
(300MW) and M/s GMR Kamalanga Energy Ltd. (260 MW),
Thereafter, the Petitioner issued the Letter of Intent (LoI) No.
27/Misc/Com/IS/1214/2007/ (Part-V)/1430 dated 17.08.2011 to
the Bidder – M/s Essar Power Ltd. for supply of 300 MW with a
request to submit the Contract Performance Guarantee (CPG) and
sign the “RfP Document” within the stipulated time of 30 days, in
compliance with
Clause 2.2.9
of
RFP. The “ Unconditional
Acceptance” of LoI by Ms Essar Power (Jharkhand) Ltd. was received
on 20.08.2011 and is attached as Annesure IV. Also, the Petitioner
issued the Letter of Intent (LoI) No. 27/Misc/Com/IS/1214/2007/
(Part-V)/1569
dated
06.09.2011
to
the
Bidder-
M/s
GMR
Kamalanga Energy Ltd. for supply of 260 MW with a request to the
to submit the Contract Performance Guarantee (CPG) and sign the
“RfP Document” within the stipulated time of 30 days, in compliance
with Clause 2.2.9 of RFP. The “ Unconditional Acceptance” of LoI by
Ms GMR Kamalanga Energy Ltd. was received on 12.09.2011 and is
attached as Annesure V.
(xx)
On submission of Contract Performance Guarantee (CPG) of the
required amount Rupees Ninety Crores only (Rs.90 Crores) in
compliance with Format 5.7 of the RFP and as part of Schedule-9 of
the PpA by M/s Essar Power (Jharkhand) Ltd. on 17th October 2011,
the “RfP Document” was signed with “M/s Essar Power (Jharkhand)
Ltd.” the Project company dully incorporated (on 19th October 2005)
by the successful bidder, M/s Essar Power Ltd. for supply of 300
MW power from its proposed 2x600 MW power project being
implemented
at
Tahsil;
Chandwa,
District:
Latehar,
State:Jharkhand. The signed RfP Document is attached as Annexure
11
VI. During the signing of the RfP documents, M/s Essar Power
(Jharkhand) Ltd. submitted to BSEB that the Project Company itself
houses the coal mining as well, hence referring to Article 4.2.1(i)
should include “if applicable”. The same aspect was considered by
BSEB at that moment, as it was not a material change, however,
subject to the approval of the Commission.
(xxi) Further, on submission of Contract Performance Guarantee (CPG) of
the required amount Rupees Seventy Eight Crores only (Rs. 78
Crores) in compliance with Formant 5.7 of the RFP and as part of
Schedule-9 of the PPA by M/s GMR Kamalanga Energy Ltd. on 9th
November 2011, the “RfP Document” was signed with “M/s GMR
Kamalanga Energy Ltd.” the Project company dully incorporated (on
28th December 2007) by the successful bidder, M/s GMR Kamalanga
Energy Ltd. for supply of 260 MW power from its proposed 3x350
MW power project being implemented at village Kamalanga, DistrictDhenkanal, State: Orissa. The signed RfP Document is attached as
Annexure VII.
(xxii) The Petitioner, humbly submits before the Commission that the
Technical and Financial bids were received on the Scheduled date of
4th April 2011 and at time 1 PM and that the entire process was
concluded within 294 days. A petition was submitted by BSEB vide
letter
no.
27/Misc/Com/IS/1214/2007/
(Part-V)/1319
dated
29.07.2011 before the Commission for approval of extension of time
period beyond 195 days i.e. upto 16.09.2011 to complete the bid
process. The actual time taken to complete the bid process under
Case-I was 294 days which is 79 days more than the time period of
195 days as per guidelines. The following table-VII captures the time
schedule as provided in the RFP versus actual time taken in
concluding the procurement process of 560 MW power initiated vide
12
NIT No.
02/PR/BSEB/2011,
dated
14.01.2011
under
Case-I
Competitive Bidding Process for long term under is given below:
Table- VII
Event
Date of Issue of RfP
Submission
of
written
clarification/amendments
if
any,
on
the
RFP/RFP
Documents by the Bidders
Pre-Bid Meeting
Revision of RfP and RfP
documents (if required) and
issuance of revised RfP and RfP
Event
Schedule as per
RfP
20.01.2011 to
03.02.2011
07.02.2011
ActualEssar
-
ActualGMR
-
-
-
11.02.2011
18.02.2011
-
-
-
Schedule as per
Actual-Essar
Actual-
RfP
Document
Bid submission and opening of
Non Financial Bid
Opening of Financial Bid of
Qualified Bidders
Shortlisting
of
Successful
Bidder(s) and issue of LOI
Signing of RfP Documents
Total Days Taken
GMR
04.04.2011
-
-
19.04.2011
-
-
29.04.2011
17.09.2011
26.09.2011
19.05.2011
120
17.10.2011
271
09.11.2011
294
(xxiii) The petitioner successfully completed the activity of ‘Signing of RfP
documents’ with the successful bidders on 9th November 2011.
(xxiv) The petitioner issued the press note in daily newspaper (Annexure
VIII) informing public about the signing of the RfP Documents and
then
made
the
evaluation
public
on
the
website
http://bseb.bih.nic.in as per the provision 6.3 of the competitive
bidding guideline issued by Ministry of Power, Govt. of India on 19 th
January 2005.
13
(xxv) The petitioner intends to procure only Five Hundred and Sixty
Megawatt (560 MW) power from M/s Essar Power (Jharkhand) Ltd.
and M/s GMR Kamalanga Energy Ltd. as the tariff offered by them
is competitive and firm. The tariff offered by other bidders was found
higher than the tariff discovered through the Case-I competitive
bidding in other states of India. The tariff discovered by other
Distribution Licensees through Case 1 bidding in tabulated in the
table below :
Sl.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
State
Gujart
Maharastra
Haryana
Madhya
Pradesh
Rajasthan
Bihar
Karnatka
Noida
power
Reliance
Mumbai
Round
Year
Developer
Capacity
(MW)
Fuel
I
I
I
I
II
II
II
2006
2006
2006
2006
2010
2010
2010
1000
1000
1000
200
1010
800
800
Coal linkage
Coal linkage
Imported Coal
Coal linkage
Coal Block
Imported coal
Imported Coal
I
I
I
II
II
II
I
I
I
2008
2008
2009
2010
2010
2010
2008
2008
2007
Adani
Adani
Essar
Aryan
KSK Energy
Essar
Shapoorji
Pallonji
Adani
Lanco
JSW
Adani
Indiabulls
Emco
Adani
PTC-GMR
Lanco
Levelised
Tariff
(Rs/KWh)
2.89
2.35
2.25
2.40
2.35
2.80
2.80
1320
680
300
1320
1200
300
1424
300
600
Coal linkage
Coal linkage
Coal linkage
Coal linkage
Coal linkage
Coal linkage
Blended coal
Coal linkage
Coal linkage
2.64
2.72
3.21
3.28
3.26
2.88
2.94
2.86
2.34
I
I
I
I
II
II
I
2007
2007
2009
2010
2011
2011
2010
1241
300
1000
450
300
260
430
Coal
NA
Coal
Coal
Coal
Coal
NA
2.45
2.95
3.25
3.06
3.69
3.69
3.77
I
2010
400
NA
3.89
I
III
2010
2011
Reliance
Essar
Adani
Essar
Essar
GMR
Thermal
Powertech
East Coast
Energy
NCC
Essar
400
200
NA
Coal Block
3.89
4.08
RPGDhariwal
200
Coal linkage
3.51
Infra,
2011
14
linkage
linkage
Block
Block
linkage
(xxvi) The petitioner submits the Evaluation Committee Report (Annexure
IX) and certificate (Annexure X) abiding with the clause 6.4 of the
Guideline.
(xxvii) The petitioner humbly submits this petition to the Commission
under following provisions :
Section 63 of the Electricity Act 2003 that states :
“Notwithstanding anything contained in section 62, the
Appropriate Commission shall adopt the tariff if such tariff has
been determined through transparent process of bidding in
accordance with the guidelines issued by the Central
Government”
Clause 6.4 of the guidelines notified on 27th July 2007 states, that:
“The signed PPA along with the certificates provided by the
evaluation committee and by the procurer as provided in
clause 6.2 shall be forwarded to the Appropriate Commission
for adoption of tariffs in terms of section 63 of the Act.”
(xxviii) The petitioner submits the following documents along with the
petition :
Annexure I
Annexure II
:
:
Annexure
III
:
Annexure
IV
Annexure V
:
Annexure
VI
Annexure
VII
Annexure
VIII
:
:
:
:
Non financial Bid Evaluation report
Approval of the Board on the Recommendation of CPC
pertaining to the infirmities/non-compliance of the
provisions of RfP in the non financial bid vide resolution
no. 8608 dated 16.06.2011 and opening of the financial
bids.
Approval of the Board vide resolution no. 8619 dated
04.08.2011 for issue of LoI to L1 Bidder and issue of
counter-offers to L2, L4, L6, L7, L8 bidders and thereafter
to L9 & L10 bidders to match L1 rate.
“Unconditional Acceptance” of LoI by Ms Essar Power
(Jharkhand) Ltd.
“Unconditional Acceptance” of LoI by Ms GMR Kamalanga
Energy Ltd.
Signed “RfP Document” with Ms Essar Power (Jharkhand)
Ltd.
Signed “RfP Document” with Ms GMR Kamalanga Energy
Ltd.
Press note in daily newspaper informing public about the
signing of the RfP Document with M/s Essar Power
15
Annexure
IX
Annexure X
:
(Jharkhand) Ltd. and Ms. GMR Kamalanga Energy Ltd.
Evaluation Committee Report
:
Certificate
(xxix) The petitioner humbly prays to the Commission :
(i) To approve/adopt procurement of Five Hundred Sixty Megawatt
(560MW) of power from M/s Essar Power (Jharkhand) Ltd. and
M/s GMR Kamalanga Energy Ltd. at the Levelised Tariff of Rupees
Three point Six Nine only (Rs. 3.690) per KWh as per the signed
“RfP Document” and under the provisions of the RfP.
(ii) Approval of the BERC of the time period 294 days i.e. delay of 79
(seventy nine) days beyond the 195 days, taken to complete the
bidding process under Case-I.
(iii) Condone
any
inadvertent
omission/errors/shortcomings
and
permit BSEB to add/change/modify/alter this filing and make
further submissions as may be required at the future date as per
the Commission’s Requirement.
(iv) To pass any other order as deemed appropriate for adoption of
tariff.
3.
Chronology of Hearing
3.1
The petition of BSEB was heard by the Commission on 28.03.2012.
An audio-visual presentation was made by BSEB through their
consultant (IL&FS). During the presentation, the commission
observed that :a.
Earlier in 2009 bids were invited for procurement of 1500 MW of
power under case -1 of competitive bidding guidelines against which
PPA was signed for purchase of 450 MW from Essar Power Ltd. The
levelised tariff adopted and approved by the commission for the said
purchase was Rs.3.057 per kwh. The present agreed price with
Essar Power Ltd is Rs.3.69 per kwh. The reason for increase in the
16
proposed procurement price for power from same project and same
supplier during short span of two years, could not be clarified by the
BSEB.
Even
the
Bid
Evaluation
Committee
has
not
made
clarification in their recommendation on this specific point.
b.
In the case of GMR, the commission observed that land requirement,
fuel linkage are yet to be completed by the bidder. Even the
requirement of water for the proposed project of GMR is 37 million
cusec, whereas, the linkage available with them is only for 30 million
cusec.
c.
It also appears that BSEB has taken deviations in the terms and
conditions of the bidding conditions approved by Government of
India for which prior approval of Commission has not been sought
by BSEB. The reasons leading to avoidance of prior approval from
the Commission by the BSEB may be obtained from BSEB.
Secretary, BERC was directed to take up the matter with BSEB for
early submission of the details and the requisite fee.
3.2
The Commission reviewed compliance of it’s directive on 22.05.2012
and directed BSEB vide letter no. BERC/Tariff-03/12-475 dated
24/05/2012
to
submit
by
6th
June
2012
the
information/justification as observed by the Commission .The next
date for hearing was fixed on 13.06.2012 .
In compliance, the BSEB vide letter no.994 dated 23.5.2012
submitted the
(i)
following documents:-
Tariff rates of the case -1 bidding for long term power procurement
carried out in other states in near past.
(ii)
The calculation of the average power purchase cost from NTPC power
stations
in
eastern
region
for
the
month
of
June
and
July
2011(annexure-II), indicative tariff offered by NTPC for supply of
additional 75 MW power from Farakka stage-III (annexure –II/A) and
tariff claimed by DVC as per petition filed before CERC for supply of 100
MW power from unit no.7 & 8 of Mejia TPS(2x500MW) annexure-II/B.
17
(iii) Copy of the presentation given before the Hon’ble Commission on
28.3.2012
The BSEB also submitted the justification for the deviations
considered by BSEB vide letter no.1239 dated 25.6.2012.
3.3
The matter was heard on 04.07.2012 by the Commission and BSEB
was
directed
to
submit
clarifications
regarding
the
bidding
procedure followed by the BSEB in the present procurement,
compliance of the Competitive Bidding Guidelines issued by Govt. of
India in this
regard and methodology for determination of levelised
tariff.
The BSEB submitted the following documents vide letter no.1374
dated 10.07.2012:a. Procedure followed by the BSEB in present procurement
b. Compliance of the Bidding Guidelines issued by Govt. of India
c.
3.4
Methodology for determination of levelised tariff.
The matter was heard on 23.07.2012 and a presentation was made
by the BSEB indicating the deficiencies of the Non-financial bids of
all the bidders namely GMR Kamalanga Energy Ltd, Essar Power Ltd
and PTC India Ltd. It was also presented that the deficiencies were
considered not very substantial by BSEB and the Board in its
meeting held on 16.06.2011 resolved that the bidders may be asked
to give the affidavit/undertaking before opening of the financial bid
to the effect that they will comply with all the conditions of the nonfinancial bids within one year. In case the successful bidder/bidder
with whom PPA is signed after the evaluation of the financial bid, are
not able to comply with the conditions as stipulated in the RfP, their
security/performance guarantee will be invoked/forfeited.
18
BSEB was directed to provide the following information/documents
by 31st July 2012:(i) Copy of the resolution /decision of the Board dated 16.06.2011
(ii) Copy of the letter sent to the bidders in compliance of the Board’s
decision/resolution
asking
them
to
furnish
the
required
affidavit/undertaking.
(iii) Copy of the affidavit/undertaking submitted by the bidders.
(iv) The model blank Excel sheet provided to the bidders along with the
RfP indicating the formula used for evaluation of bid and
computation of levelised tariff.
(v) The escalation rates and discount factor notified by CERC which has
been used for the purpose of computation of levelised tariff and bid
evaluation.
In compliance of the direction of the Commission, the BSEB
submitted vide letter
no.1539 dated 06.08.2012 the following
documents:(i) Copy of the letter sent to the bidders regarding submission of the
affidavit for meeting the non- compliances before opening of the
financial bids.
(ii) Copy of the affidavit submitted by the bidder before opening of the
financial bids.
(iii) Copy of financial bids of the bidders.
(iv) Copy of Board Resolution no.8608 for the Board meeting held on
16.06.2011.
(v) Soft copy CD of the illustration sheet and the calculation sheets of
the levelised tariff of bidders.
3.5
The matter was heard on 13.08.2012 and commission noted that the
BSEB has submitted the required information vide letter no.1539
19
dated 06.08.2012 except the relevant CERC notification of the
escalation rate and discount factor to be applied for evaluation of
levelised tariff and BSEB was directed to submit the required
notification of CERC.
3.6
The case was heard again on 11.09.2012 and in course of hearing
the BSEB was directed to submit the following at least 3 days before
the next date of hearing which was scheduled on 20.9.2012:(i) Copy of letter constituting Bid Evaluation committee with one
external member
(ii) Certificate of Bid Evaluation Committee and the procurer as per
clause 6.2 of guidelines
(iv) Paper cutting of RfP notice in two national newspapers as per 5.2 of
the guidelines.
(v) Atleast 45 days time period in case of single bid process for
submission of bids after issue of RfP documents is provided in
clause 5.5 of the guidelines. Date of uploading RfP documents
mentioned as 22.02.2011, needs to be clarified.
(vi) Copy of letter no.113 dated 14.01.2011 regarding intimation for
procurement of 1050 MW.
(vii) Copy of letter no.1319 dated 29.07.2011 seeking extension of time.
3.7
In compliance of order dated 11th September, 2012, BSEB
submitted following documents :
(i)
A copy of the order of BSEB in its internal file constituting
a committee of officers for opening of Non-financial and
Financial bid for procurement of 1050 MW power under the
process of case-1 along with copy of the internal order of BSEB
in which Evaluation Committee has been reconstituted.
20
(ii)
In compliance of clause 6.2 of the Competitive Bidding
Guidelines, a copy of the certificate of Bid Evaluation
Committee to the effect that the bid process evaluation has
been done in accordance with the provision of RfP document.
The procurer certificate on conformity of the bid process to the
guidelines has also been submitted.
(iii) Newspaper cuttings of two newspapers in which the bid
inviting RfP was published, in compliance of clause 5.2 of the
Competitive Bidding Guidelines.
(iv) Copy of letter no. 113 dated 14.01.2011 intimating the
Commission that BSEB has initiated process of procurement of
1050 MW ±20% power at delivery point through competitive
bidding process under Case-1.
(v) A copy of letter no. 1319 dated 29.07.2011 along with the
petition to approve the deviation for extension of bid process
completion time by another 46 days leading to entire bid
process for a period of 236 days.
3.8
The matter was heard on 20.9.2012 when the commission
acknowledged the documents/information submitted by BSEB
and observed that there were some discrepancies in the papers
submitted by BSEB in compliance of the order dated
11.09.2012. Moreover, some more clarifications were required
on certain issues which are summarised below :(i) BSEB has submitted only a copy of order in the
internal
file
committee
for
of
BSEB
opening
regarding
of
the
constitution
Non-financial
of
and
Financial bids. In addition BSEB has also submitted a
copy of the order in the internal file of BSEB in which
one Member of the Committee has been substituted.
BSEB has not revealed past association with the
external member, directly or through its affiliates - that
21
could create potential conflict of interest, as required
under
clause
5.9
of
the
Competitive
Bidding
Guidelines. The Board is also required to clarify
whether
any
formal
order
constituting
the
Bid
Evaluation Committee has been issued.
(ii) As
per
clause
Guidelines,
5.5
of
the
wherever
Competitive
Bidding
revised
bidding
documents/amendments are issued, the procurer shall
provide bidders at least forty-five (45) days in case of a
single stage bidding process after issue of such
documents for submission of bids. The BSEB uploaded
RfP documents along with replies on 22.02.2011. Thus
the bidders were not given 45 days for submission of
bids. BSEB
is
required
to
clarify
whether
any
modification/amendment in RfP was issued along with
clarification.
(iii) As
per
clause
Guidelines,
the
5.19
of
procurer
the
Competitive
may
extend
Bidding
timeframe
indicated in the Annexure-II. However, if the bidding
process is likely to take more than 195 days, approval
of the Appropriate Commission shall be obtained in
accordance with the Clause 5.16 which requires that
any deviation from these Guidelines shall be with the
prior approval of the Appropriate Commission.
In the present case the BSEB vide its petition dated
29.07.2011 prayed for extension of time only upto 12th
September, 2011 i.e. for a total period of 236 days for
completing the bid process but the last RfP document
signed was with GMR on 09.11.2011. However the
petition filed under Section 63 of the Act indicates that
the total period of 294 days has been taken for
22
completion of the bid process for which no prior
approval of the Commission was obtained. This lapse
on the part of BSEB needs to be explained.
(iv) As
per
Clause
4.11
(ii)
of
Competitive
Bidding
Guidelines, the ratio of minimum and maximum energy
charges (including both the non-escalable component
and escalable component incorporating escalation as
per index being used for evaluation) over the term of
PPA shall not be less than 0.5 to avoid excessive
frontloading or backloading. However this ratio in case
of the tariff quoted by M/s Essar Power Limited is less
than 0.5 resulting in excessive backloading of tariff.
(v) Two bidders with whom BSEB has signed PPA, do not
fully meet the qualifying requirement mentioned in the
RfP particularly in respect of availability of land and
fuel. Deficiencies are as follows:(a) M/s GMR Kamalanga Energy Limited.
Land requirement for the project is 1050 acres as
per MOEF environment clearance and bidder is
already in possession of 861.22 acres of land.
Further lease for 138 acres of government land
shall be executed shortly. The Bidder has not
provided any document in support for balance
50.78 acres land. The bidder has submitted only
a certificate from Owner's Engineer certifying
that 999.22 acres of land is sufficient for the
commissioning of the project.
Normative fuel requirement for GMR Kamalange
Energy Limited is 5.39 MMTPA and the bidder
has a tie up of 4.52 MMTPA. Thus, there is a
shortfall of 0.886 MMTPA.
23
Estimated requirement of water for the project is
37 Cusecs but the bidder has got water linkage
of 30 Cusecs only. The bidder has a certificate
from Owner's Engineer certifying sufficiency of
water for operation of the project.
(b) M/s Essar Power Limited
Requirement of land for the project is 1210
acres. The bidder has indicated availability of
only 760.84 acres of land. The bidder has
clarified that the land requirement for the project
has been reduced from 1210 acres to 750 acres
with certain modification in some components of
the project. The normative fuel requirement for
the project is 6.06 MMTPA and the bidder has a
tie up of 5.5 MMTPA leaving a shortfall of 0.56
MMTPA.
The Board considered these deficiencies as minor
and
condoned
approval
from
these
the
without
taking
prior
Commission.
The
Board
resolved that keeping in view the larger interest
of the State the minor deficiencies are condoned
and
the
bidders
affidavit/documentary
shall
evidence/
submit
confirmation
before the opening of the financial bids to comply
with the conditions imposed by the BSEB in the
communications to the aforesaid bidders.
In compliance of the Board's decision M/s GMR
Kamalanga Energy Limited has given affidavit
that it is in possession of 1038.625 acres of land.
This land is sufficient for the power plant. It has
24
also given the affidavit that the coal requirement
for the entire capacity has been tied up.
M/s Essar Power Limited has given the affidavit
that 750 acres of land is sufficient for the project.
It has further given the affidavit confirming
reserve of the coal block allotted to them are
sufficient for 2x600 MW project.
BSEB may submit the copy of study, if any, of
Central Electricity Authority (CEA) regarding the
requirement of land and fuel for such projects.
Alternatively,
comments
of
CEA
on
the
requirement of land and fuel may be procured. A
copy of the letter of allotment of coal blocks to
M/s Essar Power Limited by the Ministry of Coal
which may indicate whether M/s Essar Power
Limited is authorised to extract more coal than
indicated in the allotment order.
(vi) BSEB may also indicate the status of commissioning
of these projects.
The Commission directed BSEB to submit the following:(i) Clarification on constitution of Bid Evaluation
Committee as per para 3.8(i).
(ii) Clarification
on
whether
any
modification/amendment in RfP was made and
issued and if so minimum 45 day time was given
for submitting bid as required in Clause 5.5 of the
Guidelines.
(iii) Clarification for not obtaining prior approval of the
Commission for extension of time upto 294 days for
completion of bid process as required under Clause
5.19 of the Guidelines.
25
(iv)
Clarification regarding less than 0.5 ratio of
minimum
and
maximum
energy
charges
as
required under Clause 4.11(ii) of the Guidelines
(v)
Clarification on giving relaxation in minimum
qualifying requirement in non-financial bid without
prior approval of the Commission.
(vi)
A copy of the coal block allotment order of Ministry
of Coal to M/s Essar Power Limited indicating that
they are authorised to extract more coal than
stipulated in the allotment order/mining licence.
(vii) Copy
of
norms/comments
of
CEA
regarding
requirement of land and fuel for such projects.
(viii) Status of commissioning of the two projects.
The aforesaid information was required to be submitted by
7th of October, 2012 and the matter was scheduled for hearing
on 17.10.2012.
3.9
As scheduled, the matter was heard on 17.10.2012. BSEB was
represented by Shri Rakesh, EEE (Inter-state). In compliance
of order dated 20.09.2012, BSEB vide letter no. 2035 dated
17.10.2012 submitted the following :(i)
Clarification on constitution of Bid Evaluation
Committee.
A certificate dated 17.10.2012 has been submitted by
BSEB which certifies that Shri Hemant Kumar, Chief Manager,
Rural Electrification Corporation, Patna was the external
member of the Bid Evaluation Committee for evaluation of the
bids for procurement of 1050 MW ±20% through tariff based
competitive
bidding
under
case-1.
The
Certificate
also
mentions that Shri Hemant Kumar has expertise in financial
26
matters/bid evaluation and BSEB does not have any past
associations with him directly or through its affiliates which
could create a potential conflict of interest in this bid
evaluation process. Thus it is as per the provisions of clause
5.9 of the guidelines.
(ii)
Clarification
on
whether
any
modification
/
amendment in RfP was made and issued and if so
minimum 45 days time was given for submitting bid
as required in clause 5.5 of the guidelines
It has been informed by BSEB that there was no
modification / amendment in the RfP document and only
responses / clarifications to
the queries received from
prospective bidders were furnished and uploaded on website.
Since no revision of the bid documents/amendments were
issued, provision of minimum 45 days time for submission of
the bids thereafter is not applicable.
(iii)
Clarification for not obtaining prior approval of the
Commission for extension of time upto 294 days for
completion of bid process as required under clause
5.19 of the Guidelines.
BSEB has mentioned that since the tentative date for
signing of the RfP was not known to BSEB, a petition for
approval of the period beyond 236 days was not filed. The RfP
documents with Essar Power Limited and GMR Kamalanga
Energy Limited were signed on 17.10.2011 and 9.11.2011
respectively. Earlier a petition dated 29.07.2011 praying
extension of time upto 12th September, 2011 for a total period
of 236 days was submitted by BSEB for completing the bid
process. Since, the total time taken for completion of the bid
27
process is 294 days, approval for extension of time period
beyond 195 days is required as per clause 5.19 of the
Guidelines.
(iv)
Clarification
regarding
less
than
0.5
ratio
of
minimum and maximum energy charges as required
under clause 4.11(ii) of the Guidelines.
The above provision is applicable where the procurer
offers a captive fuel source (such as a captive coal mine) for
concurrent development and production of power. In the
present case, no captive fuel source has been offered by the
procurer. This provision of the Guidelines is not applicable.
(v)
Clarification
on
giving
relaxation
in
minimum
qualifying requirement in non-financial bid without
approval of the Commission
BSEB has clarified that minimum qualifying requirement
for the non-financial bid as mentioned in the RfP document
were strictly as per the Standard Bid Document issued by
Ministry of Power for procurement under Case-1 tariff based
competitive bidding process for long term procurement.
The Board of BSEB decided to approve the minor
deficiencies
and
non
compliances
in
a
conscious
and
considered decision based on the following reasons:(a) The number of bidders/developers in the country is
limited and mostly, these bidders participate in the bid
processes carried out all over the country. In case the
minor deficiencies and non compliances which have
no impact on the project execution/plant operation
are
not
relaxed
in
the
above
cases,
then
the
participation of bidders at the financial bid evaluation
stage shall be very limited which may deprive the state
28
from getting requisite quantum of power at reasonable
tariff rates.
(b) In case the Board decides to rebid due to requisite
quantum of power, not materialising at the reasonable
tariff, the capacity offered to the State in the present
bid may get unlocked, and may be offered to other
bidding States. In the process, the state may not get
sufficient competitive bids against the fresh tender
enquiry.
(c) The projects from which power is offered are under
advanced stages and the minor deficiencies and non
compliances may not affect the commissioning of the
projects/plant operation.
A copy of Board resolution no. 8608 dated 16.06.2011
is enclosed as annexure-III
(vi)
The copies of coal block allotment order of Ministry
of Coal for Chakla Coal block and Ashok karkata
Central Coal block to M/s Essar Power Limited have
been submitted as annexure-IV indicating mine
capacity of 2.0 MMTPA and 3.5 MMTPA respectively.
Approved mining plan / revised bank guarantee
submitted may clarify rated mines capacity. BSEB
has made a reference of clause 1(iv) of the coal block
allotment order issued by Ministry of Coal in this
respect.
(vii)
The copy of norms/comments of CEA regarding the
requirement of land and fuel for such projects.
BSEB has submitted in annexure (V) 'Review of land
requirement for thermal power stations' issued by CEA in
September, 2010. The report recommends 1090 acres of land
29
for 2x500MW pit head/load center, indigenous coal based
project and 1520 acres for 2x660MW project. Earlier as per
CEA report - 2007, the land requirement for above referred
capacity had been 1420 acres and 2050 acres respectively.
BSEB has submitted a copy of letter dated 21.04.2011 of
Essar Power reducing land requirement from 1210 acres to
750 acres. A copy of letter dated 9th Feb. 2011 written to CEA
by Essar Power Ltd. has also been enclosed by BSEB.
Regarding fuel requirement, in case of Essar Power
Limited, as per coal block allotment order, 5.5 MMTPA is the
mines capacity of the two coal blocks against normative
requirement of 6.06 MMTPA for the power plant. Approved
mining plan/revised bank guarantee submitted may clarify
the mines rated capacity.
A copy of mines development schedule as per letter of
allotment – status report as on 31.12.2010 indicate mines
capacity of 4.5 MMTPA in each of the mines (Peak rated
capacity)
(viii) Status of commissioning of two projects.
The commissioning schedule as per 'status of coal
block allocated' submitted in respect of Essar Power
limited indicates as under :Unit – I
600 MW
- September, 2013
Unit – II
600 MW
-January, 2014
Status of commissioning in case of GMR Kamalanga
Energy Limited has not been submitted.
The BSEB was directed to submit the following :-
30
(i)
Approved mining plan for both coal blocks
allotted to Essar Power and revised bank
guarantee submitted by Essar Power Limited.
(ii)
Letter
of
approval/comments
of
CEA
regarding reduction in land requirement from
1210 acres to 750 acres for the 2x600 MW
power plant of Essar Power Ltd.
3.10.
The matter was heard on 7.11.2012. In compliance of
Commission’s order dated 17.10.2012, the petitioner Bihar
State Power (Holding) Company Ltd. which is a successor
company of erstwhile BSEB has submitted written response.
The petitioner has not submitted the approval/comments of
CEA regarding reduction in land requirement in the project.
But it has submitted a report from M/S Essar power in which
it has been mentioned that environment clearance given by
Ministry of Environment and Forests stipulated that the land
requirement will not exceed the limit of 1210 acres and that
the mining plan of Chakla Coal Block has been approved by
the Coal Controller, Ministry Coal in which annual coal
production of 4.5 MMTPA has been approved.
In the earlier submission, the petitioner submitted that M/s
GMR kamalanga Energy Limited has replied that balance
quantity of Coal will be procured through E-auction .
In the meanwhile, petitioner is directed to submit a copy of the
environment clearance given by the Ministry of Environment
and Forests indicating the approval of land requirement not
exceeding the limit of 1210 acres. The petitioner will also
submit the latest progress report of the project of M/s Essar
Power who will supply electricity to the petitioner.
31
The case was scheduled for orders on 27.11.2012.
In compliance of the order dated 07.11.2012, the Bihar State
Power (Holding) Company Limited, erstwhile BSEB vide letter
no.2197 dated 12.11.2012 submitted the following:
A.GMR Kamalanga Energy Ltd
1. Clarification from M/s GMR to the queries raised by
BSEB, as submitted
letter
by them vide para-2 of the GMR
dated21.04.2011,related
with
arrangement
of
balance coal (0.886 MMTPA) for the thermal project and
affidavit of GMR on Coal tie up(Appendix-B)
B. Essar Power Ltd
1. Letter F, no.3-13011/63/2008 IA.II(T) dated 8th May 2009
of MoEF, Govt.of India – Related with requirement of land
under para 3(i).
Further, the Bihar State Power(Holding) Company Limited,
erstwhile BSEB vide letter no 2256 dated 22.11.2012
submitted a copy of Progress Report of Essar power Limited
for the month of October 2012. A copy of Project Progress
Report of M/s GMR kamalanga Energy Ltd for the month of
September2012 has also been submitted on 26.11.2012.
4.0
Commission’s observation on procedure followed by BSEB and
compliance of
the Guidelines.
The Commission observes that BSEB initiated single stage
bidding process for procurement of 1050MW (± 20%) through
tariff based competitive bidding for long term (25 years) under
case-1 based on the guidelines and standard bid documents
issued by Ministry of Power, Government of India without any
deviation. The NIT was issued vide no.02/PR/BSEB/2011 on
32
14.01.2011. Eight nos. of bidders submitted their bids for
varying capacities. The Bid Evaluation Committee constituted by
BSEB with one external member evaluated the non-financial
bids. As per the Bid Evaluation Committee report, only two bids
met the qualifying requirement of the RfP and deficiencies and
non-compliances were observed in case of other five bidders.
One bid of M/s Shapoorji Pallonji Energy (Gujrat) Ltd failed to
qualify. The Board of the BSEB in it’s 540th meeting held on
16.06.2011 approved opening of financial bids of seven bidders
and passed following resolutions:
“Resolved that keeping in view of the larger interest of the state
the minor deficiencies and non-compliances to the qualifying
requirement in the case of GMR Kamalanga Energy Ltd.; PTC
India Ltd, Essar power Ltd, Reliance Power Ltd and National
Energy Trading
& services Ltd are hereby approved, with the
condition that these bidders shall submit the sworn in
affidavit/documentary evidence/confirmations before opening of
the financial bids, to comply with the conditions imposed by
BSEB in the communications to the aforesaid five bidders. These
are pre-conditions to the opening of their financial bids. In case
they do not meet the targets/conditions, the BSEB may
terminate the PPA, invoking the provisions of PPA for encashing
the contract performance guarantee provided by the developer@
Rs.30 lakhs per MW and initiate fresh bid process.”
After submission affidavits by five bidders, financial bids of seven
qualifying bidders were opened on 28.06.2011.
During opening of financial bids, it was noted that the financial bid of
GMR did not contain a part of the format, the envelope contained only
the tariff sheet in the specified format of 4.10. At the instant, as per
clause 2.2.2 of the RfP, the bid was not considered for evaluation.
33
GMR vide their letter dated 28.08.2011mentioned that the part of
format 4.10 not submitted with financial bid had no financial
implication and inadvertently, it was placed in the envelope along with
non-financial bid.
Considering the fact that it has no financial
implication, the financial bid of GMR was considered for evaluation .
It was found that the levelised tariff of bidder M/s Essar power Ltd
offering 300MW was the lowest at Rs3.69 per kwh at delivery point of
BSEB. The Board in it’s 541stBoard meeting dated 04.08.2011 gave
approval to issue LoI to M/s Essar power Ltd and further suggested
that the L2.L4,L6, L7and L8 may be offered an opportunity to give
their counter-offers equal to the levelised tariff of L1 bidder and then
the balance requisitioned contracted capacity may be split among the
bidders who match the levelised tariff of L1 bidder. In response M/s
GMR kamalanga Energy Ltd submitted it’s counter-offer and matched
the levelised Tariff of L1. The PPA was signed with M/s Essar power
Ltd on 17.10.2011 for 300 MW and with M/s GMR kamalanga Ltd on
09.11.2011 for 260 MW.
4.2
Having scrutinised the petition and
chronology of
different steps
taken by the Petitioner BSEB since the initiation of bid process for
procurement of power on tariff based competitive bidding in
accordance with Competitive Bidding Guidelines, the submissions
made by petitioner BSEB and additional information/documents
submitted by BSEB, now the Commission proceeds to examine
whether in accordance with section 63 of Act, the tariff has been
determined
by
Petitioner BSEB for procurement of (i)300 MW of
power from M/s Essar Power Limited(ii)260 MW of power from M/s
GMR Kamalanga Energy Ltd through transparent process of bidding
as per provisions of the Competitive Bidding Guidelines issued by the
Central Government.
34
4.3
The Bihar State Electricity Board (hereinafter referred to as ‘BSEB’ or
‘Petitioner’) an autonomous body constituted under section 5 of
Electricity Supply Act, 1948 duly formed by Govt. of Bihar under
legislative decree vide Bihar Govt.’s notification no. 2884-A/A1121/57 dated 25th March, 1958 w.e.f. 1st April, 1958. BSEB is a
deemed licensee as per section 14 of the Electricity Act, 2003
(hereinafter referred to as ‘Act’) and is an integrated utility engaged in
the business of Generation, Transmission and Distribution of
electricity in the State of Bihar. In terms of section 172 of the Act, the
BSEB constituted under the repealed law shall be deemed to be the
State Transmission Utility (STU) and a licensee under the provisions
of the Act for a period of one year from 10th June, 2003 i.e. appointed
date. On the request of Govt. of Bihar from time to time, Central Govt.
has agreed to extend the time to continue the BSEB to function as an
STU and distribution licensee and last extension granted to BSEB is
up to 31.12.2012.
4.4
Section 63 of the Electricity Act, 2003 (the Act) states that –
“Notwithstanding anything contained in section 62, the
Appropriate Commission shall adopt the tariff if such tariff
has been determined through transparent process of bidding
in accordance with the guidelines issued by the Central
Government.”
Ministry
of
Power,
Govt.
of
India
has
issued
guidelines
for
“determination of tariff by bidding process for procurement of power
by distribution licensees” (Competitive Bidding Guidelines) vide
resolution no. 23/11/2004-R&R (Vol.-II) dated 19th January, 2005
and amended the guidelines on 30.03.2006, 18.08.2006, 27.09.2007,
27.03.2009 and 21.07.2010.
35
4.5.
These guidelines have been issued for long-term procurement of
electricity for a period of seven years and above and medium term
procurement for a period of up to seven years but exceeding one year.
These guidelines are also applicable for procurement of electricity
through competitive bidding in cases where the location, technology,
or fuel is not specified by the procurer.
In the present case in conformity with clause 2.1(a) of Competitive
Bidding Guidelines the Petitioner BSEB which is the procurer has
initiated the process for long-term procurement of electricity for a
period of 25 years under Case-1 in which the location, technology or
fuel has not been specified by the Petitioner for base load of 1050 MW
(±20%) which is in conformity with clause 2.2(i) of the Guidelines.
4.6.
As per clause 3.1(i) of the guidelines, the bid documents have to be
prepared in accordance with these guidelines and the approval of the
appropriate Regulatory Commission (BERC in the present case) is to
be obtained unless the bid documents are as per the Standard Bid
Documents issued by the Central Government. In such cases, an
intimation shall be sent by the procurer to the Commission about
initiation of the bid process.
In the present case, the Commission vide it’s letter no.BERC.Misc1/08-250 dated 21.07.2009 has noted that BSEB intends to procure
1500 MW of power under case -1 standard bidding document based
on guidelines issued by Ministry of Power, Govt. of India without any
deviation . As per tariff order dated 06.12.2010 ( case no.TP-3 of
2010) for determination of ARR and retail tariff for the FY2010-11,the
commission under directive 25(4), has directed BSEB to initiate
bidding process for (1500 – 450)1050 MW of power. Earlier BSEB has
signed PPA for 450 MW Power with Essar Power Ltd in 2010.
The
BSEB vide it’s letter no.113 dated 14.01.2011 has informed the
Commission under provision of clause 3.1(i) of the guidelines about
36
the procurement of 1050 MW±20% power at delivery point through
competitive bidding process under case -1. The commission has also
informed BSEB
vide it’s letter no.BERC/misc-1/08 (part)-36 dated
21.01.2011 that the Commission has no objection to the proposal of
BSEB to go ahead for procurement of 1050 MW±20% power through
competitive bidding under case-1. From the above, it is evident that
the Petitioner complied with the provision of clause 3.1(i) of the
Competitive Bidding Guidelines.
4.7.
As per clause 3.1(iii)(a), approval of the Commission is to be sought
before
initiating
the
bidding
process
for
the
quantum
of
capacity/energy to be procured in case the same is exceeding the
projected additional demand forecast for the next three years following
the year of expected commencement of supply proposed to be
procured. Such demand forecast shall be based on the latest available
Electric Power Survey (EPS) published by the Central Electricity
Authority.
In the present case, the commencement of supply is expected after 4
years from the date of signing of the PPA i.e by FY2015-16. As per
18th Electric Power survey published by the Central Electricity
Authority, the projected peak demand for state in 2012-13 will be
2642 MW which may go up to 5660 MW in 2017-18. The projection of
requirement of energy for the FY2015 -16, 2016 -17and 2017-18 are
25489MU, 29447MU and 32964MU respectively. Whereas availability
of power as per current Tariff Order for FY2012-13 is 14142 MU and
the
proposed
procurement
of
additional
560MW
would
mean
increased availability by 4169 MU per annum. Another 450 MW long
term PPA signed with M/s Essar Power Ltd will fetch 3351 MU per
annum. The total availability including the proposed procurement will
be 21662 MU by FY2015-16. Thus, the proposed procurement of 560
MW will be well within the projection made by the 18th EPS. Therefore,
37
prior permission of the commission was not required as per clause
3.1(iii)(a) of the Competitive bidding Guidelines and only intimation
was required to be given by the Petitioner.
4.8
The
clause3.2(II)
of
the
guidelines
is
applicable
in
case
-1
procurement to ensure serious participation in the bid process and
timely commencement of supply of power, the bidder, in case the
supply is proposed from a station to be set up, should be required to
submit along with it’s bid, documents in support of having
undertaken specific actions for project preparatory activities in
respect of matters relating to land ,fuel, water ,environmental
clearance and forest clearance etc.
In present case, there were deficiencies and non- compliances in case
of five bidders . The Board of the BSEB accorded approval for opening
of the financial bids after getting sworn in affidavits to comply fully
with the qualification
requirements as per the RfP.
The issues
relating to deficiencies have been examined in para 5.2.12 dealing
with compliance of clause 5.11.
4.9
The clause 2.3 and 3.1(ii) states that approval of the Appropriate
Commission shall be sought in the event of deviations from the bid
conditions contained in these guidelines, following the
process
described in para 5.16 of the Guidelines.
The deficiencies and non-compliances in the non-financial bids as
mentioned above in para 4.8 have been examined in Para 5.2.12
dealing with compliances of clause 5.11 of the guidelines. Although,
these minor deviations do not have any appreciable effect on
competitiveness and transparency in bid process and in case, minor
deficiencies
which
hardly
have
impact
on
the
project
execution/operation are not relaxed, the participation of bidders at
financial evaluation stage shall be very limited and may deprive the
38
state of required quantum of power at reasonable and competitive
tariff rates. However, BSEB should have taken prior approval of the
Commission before opening of financial bids.
5.0
Compliance of clause 4(Tariff Structure) of the guidelines
5.1.1
In compliance of clause 4.1 of the guidelines, provision for monthly
billing has
been made in article 8.2 of the PPA and various
parameters of multi-part tariff have been included in the format 4.10
for financial bids in the RfP.
5.1.2
In compliance of clause 4.3, para 8 of the notice inviting RfP provides
that tariff shall be payable by the procurer in Indian rupee as per
provisions of the PPA. The section 1.3.1.11 of RfP also provides that
the transmission charges, for transmission of power from injection
point to delivery point, will initially be paid by the seller and will be
reimbursed by the procurer.
5.1.3
In compliance of clause 4.4 of the guidelines, the clause 2.4.1.1(B)(vii)
of RfP provides that the quoted escalable capacity charges and quoted
non-escalable
capacity
charges
shall
be
based
on
normative
availability . In case of availability being lower, the capacity charges
shall be payable on proportionate basis as mentioned in 4.1(iv) of
Schedule4 of the PPA
5.1.4
In compliance of clause 4.5, the clause 4.2.4 of schedule 4 of the PPA
provides
for
incentive
for
availability
higher
than
normative
availability. The clause 4.2.5 of Schedule 4 of the PPA also provides
for penalty in case availability during a year is less than 80%.
5.1.5
In compliance of clause 4.6 of the Guidelines, Schedule 3.1 of the PPA
provides for scheduling, dispatch and grid code and article 4.5.3 of
the PPA provides that the seller shall be entitled to sell such available
capacity not scheduled by the procurer to any person without losing
39
the right to receive the capacity charges from the procurer for such
unscheduled capacity. In such a case, the sale realization in excess of
variable charges, shall be equally shared with the procurer.
5.1.6
The articles 10.1.1 and 10.2.1 of the PPA also provides in compliance
of clause 4.7 of the guidelines that any change in tax or introduction
of any tax made applicable for supply of power by the seller as per the
terms of the agreement shall be passed on to the monthly tariff.
5.1.7
Clause 4.8 of the Guidelines is complied through appropriate
provision in clause 2.4.1.1(B)(x) of RfP.
5.1.8
The provision of payment security mechanism as per clause 4.10 of
the Guidelines has been included in article 8.4 of the PPA.
5.1.9
In compliance of clause 4.11, Section 2.4.1.1(B)(viii) &(ix) and format
4.10 of the RfP provides for option to the bidder to either quote firm
capacity
and energy charges or both non-escalable and escalable
energy charges.
5.1.10
Clause 4.14 of the Guidelines has been complied in art. 4.4.1 and
4.3.1 of schedule 4 of the PPA regarding payable energy charges .
5.2
Compliance of clause 5 (Bidding Process) of the guidelines
5.2.1
As per clause 5.1 of the Competitive Bidding Guidelines, the procurer
may, at his option, adopt a single stage tender process for long-term
or medium term procurement under Case-1 combining the RfP and
RfQ processes. Accordingly the Petitioner BSEB has adopted single
stage tender process in the present case for procurement of 1050
MW±20% of power under Case-1 of the Competitive Bidding
Guidelines on long-term basis for a period of 25 years. The BSEB
issued
a
‘Notice
inviting
tender
‘
no.02/PR/BSEB/2011
for
procurement of 1050 MW(±20%)power under case-1 route based on
the standard bidding document without any deviation.
40
5.2.2
As per clause 5.2 ,the procurer shall publish RfQ (RfP in single stage
bid process)notice in at least two national newspapers, company
website and preferably in trade magazines also to accord it wide
publicity. The bidding shall necessarily be by way of International
Competitive bidding .For the purpose of issue of RfQ (RfP in single
stage process) minimum conditions to be met by the bidder shall be
specified by the procurer in the notice.
In compliance of clause 5.2 of the guidelines, petitioner BSEB
published the RfP notice (international competitive bidding) in two
national newspapers on 16.01.2011 and RfP was also uploaded on
BSEB’s website and made available for downloads from 20.01.2011 to
03.02.2011.
Clause 2.1 of the RfP specifies the qualification requirements which
was based on standard bid documents issued by Ministry of Power.
5.2.3
As per clause5.3, Procurer shall provide only written interpretation of
the tender document to any bidder/participant and the same shall be
made available to all other bidders All parties shall rely solely on the
written communication and acceptances from bidders.
In compliance of clause 5.3 of the Guidelines, BSEB has mentioned to
have provided only written interpretation of the tender document at
all points of time during the bid process to all the bidders.
5.2.4
In compliance of clause 5.4(i), BSEB has specified 1050 MW as
quantum of electricity proposed to be procured in clause1.3.1.2 of the
RfP, the minimum bid capacity of 100 MW has been specified in
clause 1.3.1.3 of the RfP. Clause 1.3.1.4 of the RfP
specifies that
proposal is for procurement of base load requirement and the period
of contract has been specified as 25 years in clause 1.3.1.1. Further
in compliance of clause 5.4(i), the normative availability has been
specified as 85% in article 1.1 of the PPA signed with M/s Essar
41
Power Limited and
M/s GMR kamalanga Energy Ltd. The Delivery
Date has been specified in clause 1.3.1.5 of the RfP as 4 years from
the date of signing of the PPA. BSEB has also specified in clause
1.3.1.8 of the RfP that the bidder shall provide the point of injection in
its bid. The networh criteria to be fulfilled by all the bidders has been
specified in clause 2.1.2.1 of the RfP. Thus, BSEB has complied with
clause 5.4(i) of the guidelines.
5.2.5
In compliance of clause 5.4(iii) of the guidelines, clause 2.9 of the RfP
specifies that period of validity of the bid is 120 days after the bid
deadline.
5.2.6
In compliance of clause 5.4(vi) of the guidelines, BSEB has provided
in clause 2.5(i) of the RfP for verification of financial data by checking
with bidder’s, lender’s/banker’s/financing institutions/any other
persons as necessary.
5.2.7
In compliance of clause 5.5 of the guidelines, the RfP documents,
along with reply to queries raised by the bidders were uploaded on
BSEB’s website on 22.02.2011, with 4th April, 2011 as the last date of
submission of bids. As per guidelines, wherever revised bidding
documents/amendments are issued, the procurer has to provide at
least 45 days time in case of single stage bidding process for
submission
of
bids
.BSEB
modification/amendment
in
has
the
clarified
RfP
that
there
documents
was
and
no
only
responses/clarifications to the queries received from prospective
bidders were furnished and uploaded on website on 22.02.2011and
therefore, minimum period of 45 days time thereafter for submission
of bids was not applicable.
5.2.8
In compliance of clause 5.6(v), BSEB has specified in the clause 1.3.1.
5 of the RfP that scheduled delivery date will be 4 years from the date
of signing of RfP documents and as per provisions of art.4.1 of the
42
PPA. The liquidated damage that would apply in event of delay in
supply is provided in art.4.8 of the PPA.
5.2.9
In compliance of clause 5.6(vi) of the guidelines, BSEB has mentioned
that escalation rates notified by CERC to be utilised for bid evaluation
purpose as per provision in clause no.3.4.4 of RfP.
5.2.10
In compliance of clause 5.7 of the guidelines, the number of qualified
bidders after completion of evaluation of the non-financial bids were
seven, out of which one bidder M/s PTC India Ltd, an inter-state
trading licensee, offered power from four different generating stations
and M/s NET&SL, an inter-state Trading licensee, offered power from
three different generating stations. Hence, in all there were 12 price
bids from different generating stations.
5.2.11
In compliance of clause 5.9 of the guidelines, the Bid Evaluation
Committee constituted by BSEB included one external member Shri
Hemant Kumar from Rural Electrification Corporation Ltd. As per
guidelines, the external member shall have expertise in financial
matters/bid evaluation. The procurer shall reveal past associations
with external member directly or through it’s
affiliates that could
create potential conflict of interest. BSEB has submitted a certificate
dated 17.10.2012 in compliance of the aforesaid provisions of the
guide line.
5.2.12
In compliance of clause 5.11 of the Guidelines, Bid Evaluation
Committee reported that only two bidders had fully complied with the
stipulation in clause 2.1.2.2 of the RfP in respect of various project
preparatory activities. However the Board of Petitioner BSEB vide its
Resolution No. 8608 in the 540th Board meeting held on 16.06.2011
accorded approval for opening of financial bids of seven bidders with
the condition that the five bidders, with minor deficiencies and non-
43
compliances, should submit sworn in affidavits to comply fully with
qualifying requirement of the RfP . After verifying the submission to
queries, affidavits and original documents of the bidders, the financial
bids were opened on 28.06.2011. The Commission observes that prior
approval of the Commission was required in respect of deviations from
the qualification requirement of the RfP.
5.2.13
In compliance of clause 5.12 of the guidelines BSEB has reported that
there was no deviations from the tender conditions in the price bid
submitted by any bidder.
5.2.14
In compliance of clause 5.14(i) of the guidelines, BSEB has reported
that in compliance of clause 3.4.5, 3.4.6, 3.4.7 and 3.4.8 of RfP, the
bids submitted by bidders developing generating stations outside the
state of Bihar were evaluated after loading with the applicable interstate transmission charges and making adjustments for transmission
losses.
5.2.15
In compliance of clause 5.15 of the guidelines, the bidder who has
quoted the lowest levelised tariff was declared successful bidder.
Clause 3.5.2 of the RfP, also mentions that all financial bids of
qualified bidders shall be ranked from lowest to the highest .BSEB
declared Essar Power Ltd, the bidder, who has quoted the lowest
levelised tariff as the ‘successful bidder’.
The BSEB Board vide the resolution number 8619 in the 541st Board
meeting held on 4.08.2011 gave approval to issue LOI to M/s Essar
Power Ltd(L1) bidder for supply of 300 MW power at the quoted
levelised tariff of Rs3.69 per kwh and further suggested that the
L2,L4,L6,L7 may be offered an opportunity to give their counter-offers
equal to the levelised tariff of L1 bidder. In response, M/s GMR
44
kamalanga energy Ltd submitted it’s counter offer and matched the
levelised tariff of L1.
5.2.16
In compliance of clause 5.16 of the guidelines, BSEB has reported
that the Case-1 bid process was initiated without any deviation from
the guidelines.
5.2.17
In compliance of clause 5.19 of the guidelines, The BSEB has
mentioned that the last date for submission of bid was 04.04.2011,
while the date of issue of RfP was 14.01.2011, thus allowing more
than 75 days for submission of the bid. Further, the Case-1 bid
process was completed with the signing of the RfP on
09.11.2011
with GMR Kamalanga Energy Ltd. BSEB has further reported that
the bid process and signing of the RfP documents completed in 294
days i.e 99 days more than the maximum allowed time period of 195
days as per guidelines.
It has been clarified that since the tentative date for signing of RfP
documents were not known, the petitioner BSEB had earlier
submitted an application vide letter no.1319 dated 29.7.2011 for
approval of extension of time for anticipated total period of 236 days
to complete the bidding process.
5.3
Compliance of clause 6 of guidelines
5.3.1
The clause 6.2 of the guidelines stipulates that after the completion of
bid process , the Bid Evaluation Committee shall give a certificate on
conformity of the bid process evaluation according to the provisions of
RfP document and the procurer shall provide a certificate on
conformity of the bid process to
these
guidelines. The certificate
given by the Bid evaluation committee was not in conformity with the
guidelines. In course of hearing on 11.09.2012, BSEB was directed to
furnish the required certificates of the bid evaluation committee and
45
the procurer as per provisions of the guidelines . The certificates of
Bid Evaluation Committee and the procurer, submitted by BSEB on
20.09.2012 , are in conformity with the guidelines.
5.3.2
In compliance of the clause 6.3 of the guidelines, the BSEB issued
press note in daily newspapers informing the public about signing of
the PPA and other RfP documents, accessibility to download the
signed PPA and other RfP documents from its website. The
information about the name of the successful bidder and details of
tariff quoted by all the bidders were also given, keeping all other
bidders anonymous.
5.3.3
In compliance of clause 6.4 of the Guidelines, BSEB has submitted
the petition along with the signed PPA and certification/certificates
provided by the Evaluation Committee and by the procurer as
provided in clause6.2 of the guidelines.
6.0
Commission findings and views
6.1.1
The Bid Evaluation Committee constituted by BSEB in accordance
with the provisions of clause 5.9 of the Guidelines included one
external
member
Shri
Hemant
Kumar,
Chief
Manager,
Rural
Electrification Corporation, Patna. The Bid Evaluation Committee in
its report on the evaluation of non-financial bids observed that there
were infirmities in the non-financial bids of six bidders with respect
to provision of RfP. The committee mentioned that two bidders met
the qualifying requirement strictly as per the RfP document namely:(i) India bulls Power Ltd (ii) Jaypee power ventures Ltd. Further, there
were minor deficiencies and non-compliances of the qualifying
requirement as set out in the RfP document in case of the following
five bidders:(a) GMR Kamalanga Energy Ltd (b) PTC India Ltd (c)
46
Essar Power Ltd (d) Reliance Power Ltd (e) National energy trading &
services Ltd
The report further mentions that the bid of M/s shapoorji Pallonji
Energy (Gujrat) pvt. Ltd does not meet the qualification requirements
as per RfP document.
6.1.2
The matter was placed before the Board of Petitioner BSEB. The
deficiencies
and
non-compliances
in
respect
of
qualification
requirements as per clause 2.1.2.2 of the RfP regarding availability of
land, fuel, water and forest/environment clearance, etc.
were
considered and the Board approved opening of the financial bids in
it’s 540th Board meeting held on 16.06.2011and passed the following
resolution:“Resolved that keeping in view of the larger interest of the
state the minor deficiencies and non-compliances of the
qualifying requirement in the case of GMR Kamalanga Energy
Ltd.; PTC India Ltd, Essar power Ltd, Reliance Power Ltd and
National Energy Trading & services Ltd are hereby approved,
with the condition that these bidders shall submit the sworn
in
affidavit/documentary
evidence/confirmations
before
opening of the financial bids, to comply with the conditions
imposed by BSEB in the communications to the aforesaid five
bidders. These are pre-conditions to the opening of their
financial
bids.
targets/conditions,
In
case
they
the BSEB
do
not
may terminate
meet
the
the PPA,
invoking the provisions of PPA for encashing the contract
performance guarantee provided by the developer@ Rs.30
lakhs per MW and initiate fresh bid process.”
47
6.1.3
The two bidders with whom BSEB has signed PPA do not fully meet
the qualification requirement mentioned in the RfP. The deficiencies,
as per non-financial bid evaluation report, are as follows:i. GMR Kamalanga Energy Ltd: Land requirement for the Project is 1050
acres as per MOEF environmental clearance and the bidder is already
in possession of 861.22 acres of land. Further lease for 138 acres of
government land shall be executed shortly. The bidder has not
provided any document in support of balance 50.78 acres of land.
The fuel requirement is 5.39 MMTPA and the bidder has tied up for
4.52 MMTPA. Thus, there is a shortfall of 0.886 MMTPA..The available
water linkage is also less by 7cusec.Against estimated requirement of
37 cusec, water availability is for 30 cusec.
ii Essar Power Ltd:- The requirement of land for the project is 1210
acres whereas bidder has indicated availability of only 760.84 acres of
land. They have clarified that the land requirement for the project has
been reduced from 1210 acres to 750 acres by modifications in the
switchyard, colony, cooling and ash disposal systems besides shifting
coal crushing system to the captive coal mines area.
The fuel requirement for the project is 6.06 MMTPA and the bidder
has indicated availability of 5.5MMTPA leaving a short fall of 0.56
MMTPA.
The Commission observes that the BSEB should have taken prior
permission of the Commission before opening of their financial bids.
6.1.4
In compliance of the Board's decision M/s GMR Kamalanga Energy
Limited has given affidavit that it is in possession of 1038.625 acres of
land. This land is sufficient for the power plant. It has also given the
affidavit that the coal requirement for the entire capacity has been
tied up. Against Coal linkage available with them for 4.52 MMTPA,
48
reassessed coal requirement at normative availability is 4.62 MMTPA.
The above has been detailed in coal computation sheet of appendix-B,
letter dated 21.04.2011 of M/s GMR kamalanga Energy Limited.
M/s Essar Power Limited has given the affidavit that 750 acres of land
is sufficient for the project. It has further given the affidavit
confirming reserve of the coal blocks allotted to them are sufficient
for 2x600 MW project.
As per annexure-v of letter no. 2035 dated 17.10.2012 submitted by
BSEB
in
compliance
of
order
of
the
Commission
dated
25.09.2012,’Review of land requirement for thermal power stations’
issued by CEA in September 2010 recommends 1090 acres of land
for 2x500MW pit head/load center, indigenous coal based project and
1520 acres for 2x660 MW project .Earlier it was 1420 acres and 2050
acres respectively .Thus the land requirement has been reduced by
23% and 26% respectively for the above mentioned capacity by the
CEA.
As directed by the Commission in course of hearing on 7.11.2012,the
BSEB has submitted
a copy of environment clearance accorded to
M/s Essar Power Ltd dated 8th May 2009 which mentions that total
land requirement for 2x600 MW proposed project shall not exceed
1210 acres.
The petitioner has submitted a copy of letter dated 5.11.2012 from
M/s Essar power Ltd mentioning major factors leading to reduced
land requirement of 750 acres only as detailed below:(i)
Use of Gas insulated substation
(ii)
Use of air cooled condenser instead of conventional cooling system
(iii)
Plan for multi-storied building for colony
(iv)
Use of High concentration slurry disposal system for ash
49
(v)
Coal crushing and storage facility shifted to captive coal mines
area.
As annex.-VI of letter no.2035 dated 17.10.2012, BSEB has submitted
a copy of letter dated 21.4.2011 of Essar power Ltd indicating sectionwise details of reduction in land requirement. A copy of letter
ref.no.Tori/phase-1/CEA/001 dated 9.02.2011 written to CEA by the
developer has also been enclosed by BSEB as annex.-1 mentioning
reduction in land requirement from 1210 acres to 750 acres .They
have also mentioned that 760 acres of land has been acquired by
them.
Regarding status of Coal blocks ,the copy of approved Mining Plan for
Chakla coal block of Essar Power Ltd
submitted by BSEB as
annexure-2 indicate targeted coal production of 4.5 MMTPA. The copy
of Status report as on 31.09.2012 for Ashok Karkata coal block
submitted to Coal controller ,MOC, Govt.of India mentions 4.5
MMTPA as coal production. A copy of Coal block allotment order
dated 6th November 2007 by Ministry of Coal ,Govt of India has also
been enclosed wherein assessed mine capacity of 3.5 MMTPA by
CMPDIL has been mentioned.
The mines capacity of both Chakla and Ashok Karkata blocks are
sufficient to meet the requirement of 2x600 MW project has been
mentioned in the affidavit submitted by M/s Essar Power limited .
As
mentioned
in
the
financial
bids,
the
expected
date
of
commissioning for Essar Power is in 2014 and for GMR ,it is in the
middle of 2012.
The copy of progress report of Essar power Limited for the month of
October 2012, submitted on 22.2.2012 by BSEB, mentions date of
synchronization in 2014.In case of GMR Kamalanga Energy Limited
,the copy of Project Progress Report for the month of September 2012
50
mentions
commissioning
of Unit-1 by December 2012 and other
units are scheduled to follow by 2 months and 4 months respectively.
6.2
As per para 5.15 of the Guidelines, the Bid evaluation committee shall
have right to reject all price bids if rates quoted are not aligned to the
prevailing market price. It is provided in art.3.5.12 of the RfP also.
In the present case, a glance over the tariff rates submitted by BSEB
in annex-1,letter no.994 dated 23.05.2012 indicate that during 2009
to 2011 in case of long term power procurement ( case -1),the power
procurement rates varied between Rs2.35 to Rs. 4.08 per kwh in other
states of the country.
The petitioner has also furnished the average power purchase cost
from NTPC power stations in Eastern Region for the months of June &
July 2011.The mentioned cost are Rs.4.26 and Rs4.10 per unit
respectively.
The indicative tariff based on March 2012 fuel cost for Farakka-III
STPS of NTPC, as per copy of letter dated 23.04.2012 submitted by
BSEB, is Rs4.50 per kwh.
In the discussion note of 541st Board meeting of the BSEB dated
4.08.2011,
para 8, it has been mentioned that present average
landed rate of supply of power by NTPC to the state under central
sector allocation is Rs.4.53 per unit. In May2010, when 450 MW
power was tied up with M/s Essar power Ltd at the levelised tariff of
Rs.3.057 per kwh, the average rate of power supply by CPSU was
Rs2.46 per kwh .In the present case, L1 rate of Rs.3.69 per kwh is
from the same power station of M/s Essar power Ltd. In short span of
14 months there have been a steep rise in the power supply rates.
However, the average rates of power supply to the state from Farakka,
Kahalgaon and Talchar stations of NTPC submitted by BSEB as per
directive of the Commission on 17.10.2012 for FY2011-12 and
51
FY2012-13(till September 2012) are Rs3.22 per unit and Rs.3.33 per
unit respectively.
6.3
BSEB after signing of the PPA has made the PPA public through
advertisement in the newspapers. The PPA and other signed RfP
documents were also placed on the website of the BSEB. The
information about the name of the successful bidder and details of
tariff quoted by all the bidders were also given, keeping all other
bidders anonymous.
7.0
Conclusion:
The Commission observes that the petitioner issued “Notice Inviting
Tender” NIT no.02/PR/BSEB/2011 on 14.01.2011 for procurement of
1050MW±20% power through tariff based
competitive bidding for
long term procurement under case-1, based on the guidelines and
Standard Bid Document issued by Ministry of Power ,Govt. of India
without any deviation.
The Commission further observes that as per Bid Evaluation
Committee report, only two bids
fully met the qualification
requirement of the RfP and minor deficiencies and non-compliances
were observed in case of other five bidders in the non –financial bids.
However, the Board of BSEB in their 540th
Board meeting vide
resolution no. 8608 accorded approval for opening of financial bids of
seven bidders with the condition that five bidders with minor
deficiencies should submit affidavits to comply with qualifying
requirement of the RfP. After submission of required affidavits by
these five bidders, the financial bids of seven bidders were opened.
These minor deviations do not have any appreciable effect on
competitiveness and transparency in bid process and in case ,minor
deficiencies and non-compliances which hardly have impact on the
52
project execution/operation are not relaxed, the participation of
bidders at financial bid evaluation stage shall be very limited and may
deprive the state of
required quantum of power at reasonable and
competitive tariff rates.
With the experience of case -1bidding, it is also noted that entire
bidding process takes more than 180 days. In case fresh bid is
invited, it will take another 180 days to finalise the bid process
without any certainty of tariff which may be arrived.
As per details submitted by the licensee, the commission observes
that in the states like UP and Karnataka, the tariff approved in
2010/2011 for long term power procurement under case -1 bid
process have been higher than the tariff
of Rs3.69/kwh offered by
M/s Essar power Limited and GMR kamlanga Energy Limited in the
present case. In UP tariff of Rs4.08/kwh has been approved in case of
Noida power and in Karnatka approved tariff rates were Rs3.77/kwh
and Rs3.89/kwh.
Thus, the Commission is of the view that the tariff arrived by BSEB
after following the bid process in accordance with the guidelines is
quite competitive and reasonable compared to prevailing scenario of
availability and rate of power in the market. The Petitioner has
followed a transparent process in procurement of this power on tariff
based competitive bidding.
Therefore, the commission adopts the levelised tariff of Rs.3.69/kwh
and
also the year- wise tariff for which PPAs has been signed for
procurement of 560 MW of Power to meet its base load requirement
for a period of 25 years .
53
In Case No.7/2012,BSEB(now substituted by BSPHCL),has submitted
a proposal for
approval and adoption
of tariff for procurement of
additional 75MW base load power offered by Essar Power Limited on
long term basis on the same terms and conditions as agreed in PPA
executed on 17.10.2012 at levelised tariff of Rs.3.69/kwh. The
Commission will issue order separately in that Case no.7/2012.
Sd/(K.P.singh)
Member
Sd/(S. C. Jha)
Member
54
Sd/(U.N. Panjiar)
Chairman