order adoption of tariff adani

8/3/2019 Order Adoption of Tariff Adani

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Rajasthan Elec tric ity Regulatory Commission, Jaipur

Petition No. 217/ 10

In the matter of adoption of tariff & approval of extended time line for

procurement of 1000MW and additional 200MW of base load power

discovered through the process of competitive bidding under Case-1 as

per the guidelines for determination of tariff by competitive bidding

process .

..

Coram:Sh. D.C. Samant, Chairman

Sh. K. L. Vyas, Member

Sh. S.K. Mitta l, Member

Pet itioners : Ra jastha n Ra jya Vidyut Prasaran Nigam Ltd ., Ja ipurOn beha lf of: Ja ipur Vidyut Vitran Nigam Ltd .,

Ajmer Vidyut Vitran Nigam Ltd .,

Jod hpur Vidyut Vitran Nigam Ltd .

Date of hearing : 11.5.10, 8.4.10 & 19.3.10

Presents:

1. Sh. B.K.Ma khija , SE (NPP), RVPN, (on 19.03.10 & 08.04.10)

2. Sh. R.K. Kasliwa l, CE (NPP&R), RVPN(o n 19.03.10,08.04.10 & 11.05.10)

3. Sh. Sanja y Ra i, Co nsultant of RVPN (o n 19.03.10, 08.04.10 & 11.05.10)

4. Sh. R.K. Sha hi, Consultant of RVPN (on 19.03.10 & 08.04.10 &11.05.10)

5. Sh. A.K. Sharma, SE (NPP&R), RVPN (on 19.03.10, 08.04.10 &11.05.10)

6.

Sh. Bha vi Meena , SCO, Relianc e (on 11.05.10)7. Sh. Ritendra Bha tta c herjee, Ma na ger , Relianc e Pow er(on 11.05.10)

8. Sh. Achintya Dvived i, Ad voc a te , M/ s RKM Pow ergen (o n 11.05.10)

9. Sh. J. Mo ha n, GM, M/ s RKM Powergen (on 11.05.10)

Date of Order : 31.5.2010


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seeking approval of the Commission for adoption of tariff quoted by

M/s Adani Power Rajasthan Ltd. (APRL) discovered through

competitive bidding under Case-1 in terms of section 63 of the

Elec tric ity Act, 2003 (hereinafter refe rred as the Ac t ). Pet ition w as

filed under c lause 5.16 & 6.4 of the Guidelines for Determina tion of

Tariff b y Bidd ing Proc ess for Proc urement o f Pow er by Distribution

Licensees (hereinafter referred to as Guidelines), issued by the

Ministry of Power, Government of India, vide notification No.

23/ 11/ 2004-R&R (Vol. II) da ted 19-01-2005 (inc luding its amendments

da ted 30.03.2006, 18.08.2006, 27.09.2007 and 27.03.09), und er sec tion

63 of the Ac t w ith a p rayer for:

(a ) Approval of deviations in respect of extended time line beyond

195 days as spec ified in c lause 5.19.

(b ) Adop tion of Tariff for purc hase of long term Base Loa d pow er as

quoted by the Suc c essful Bidder (M/ s Ad ani Pow er Ra jastha n

Limited) und er Ca se-1 Bidd ing Proc ess und er Sec tion 63 of the

Act.

(c ) Approval for procurement of additional 200 MW of base load

pow er offered by the Suc c essful Bidd er (M/ s Ad ani Pow er

Rajasthan Limited) at the quoted tariff on the same terms &

conditions.

2. The p et ition ha s bee n filed under Sec tion 63 of the Ac t. Sec tion 63

envisages that 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

Go vernment. The Ce ntra l Government, Ministry of Pow er has issued

the g uidelines c ontemp la ted unde r Sec tion 63 of the Ac t, titled

Guide lines for Determina tion o f Tariff by Bidd ing Process for

Procurement of Power by Distribution Licensees vide Resolution no.

23/ 11/ 2004-R&R Vol. II da ted 19.01.2005 and amendments the reo f.

Bidd i h ll b i iti t d i th St d d Bid D t (SBD)


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(referred to as procurers for the purpose of competitive bidding)

ma y ad op t the g uide lines for long -term procurement for a p eriod of

7 years and above and medium term procurement for a period

exceed ing 1 year up to a period of seven years.

b ) Procurement by more than one distribution licensee through a

c om bined b id p roc ess is permitted and in suc h a c ase, the p roc urer

has the op tion of cond uc ting the b id p roc ess throug h an a uthorized

representative.

c ) The b id d oc umenta tion is req uired to b e p rep a red in ac c orda nce

with the guidelines and the standard bid documents issued by the

Central Government. In such cases, intimation shall be sent by the

procurer to the appropriate Regulatory Commission about initiation

of the bidding process. In the event of deviation from the bidding

conditions contained in the guidelines, approval of the Appropriate

Commission shall be sought by the procurers or their authorized

representative.

d ) The p roc urer ma y, at his op tion, adop t a single stage tend er process

for long term or medium term procurement under Case-1,

c ombining the RFP and RFQ p roc esses. Proc urer or authorized

representative shall prepare bid documents including the RFQ and

RFP (only RFP in single sta ge proc ess) in line with these guidelines andsta nd ard b id doc uments. The p roc urer sha ll pub lish a RFQ (RFP in

single stage process) notice in at least two national newspapers,

c ompa ny web site a nd preferab ly in trad e m ag azines also to ac cord

it wide pub licity. The b idd ing sha ll nec essarily be b y wa y of

International Competitive Bidding (ICB). In case, the bidders seek

any deviation and procurer finds that deviation is reasonable, theprocurer shall obtain approval of the appropriate Commission

be fore ag reeing to such de viation.

e) Procurer shall provide only written interpretation of the tender

document to any bidder / participant and the same shall be made


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wa nts to c ontinue with the b idd ing process, the sam e m ay b e d one

with the c onsent of the Ap prop ria te Comm ission.

g ) The proc urer shall constitute a Comm ittee for eva lua tion of the bids

with at least one Member external to the procurer organization and

affilia tes. The external Mem ber sha ll have expe rtise in financ ial

matte rs/ b id eva lua tion. The p roc urer sha ll revea l pa st a ssoc iation

with the external Members directly or through its affiliates that could

c rea te p ote ntia l c onflic t of interest.

h) Eligible bidders shall be required to submit separate technical and

price b ids a long with nec essa ry bid -gua rantee. The b id sha ll be

opened in public and representatives of bidders desiring to

partic ipa te sha ll be a llow ed to rem ain p resent. The b idder, who has

quoted lowest levellised tariff as per evaluation procedure, shall be

c onsidered for aw ard o f the co ntrac t.

i) The Power Purcha se Ag ree ments (PPAs) sha ll be signed by the

procurers with the selected bidders consequent to the selection

proc ess in a c c orda nce with the terms and c ond itions as fina lized in

the bid document before the RFP stage. After signing of the PPAs,

the Evaluation Committee shall provide appropriate certification on

adherence to the guidelines and to the bid process established by

the p roc urer. The p roc urer sha ll a lso m ake the eva luation of b idpublic by indicating terms of minimum bid and anonymous

comparison of all other bids and also the contract signed with the

successful bidder.

j) The signed PPA a long w ith the c ertifica tion c ertific a tes p rovided by

the eva luation committee a nd by the p roc urer as provided in c lause

6.2 shall be forwarded to the Appropriate Commission for adoptionof ta riffs in terms of Sec tion 63 of the Ac t.

3. The pet ition was admitted by the Co mmission on 2.3.2010. The

Commission sought some additional information to establish that tariff

h b d t i d th h t t f biddi i


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of each event and justification of additional 200MW of base load

po wer prop osed to b e p roc ured and c omp lete b id evaluation repo rt

a long w ith justific a tion about rea sona b ility of ta riff.

4. The petitioner submitted supp lementa ry petition c onta ining the

information desired by the Commission on 30.03.10 for further

consideration.

5. Based on the submissions made by the petitioner and subsequent

submissions made in response to the information desired by the

Commission it is observed that RVPN on behalf of Jaipur Vidyut Vitran

Nigam Ltd., Ajmer Vidyut Vitran Nigam Ltd. and Jodhpur Vidyut Vitran

Nigam Ltd., invited bid for procurement of power for long term under

Case -1 bidding meeting the Base load power requirements of the

proc urers in ac c orda nc e w ith the g uidelines issued by the Go I. The

petitioner obtained valid authorizations from the procurer i.e. three

Disc om s to undertake b id p roc ess. The Pet itioner ha d ea rlier filed a

petition before Commission p raying to a llow proc urement of 1500 MW

of p ow er on long term b asis for 25 yea rs and to take note of initiation

of b id p roc ess. The Co mmission vide its order da ted 3.11.08 allowed

petitioner to proceed with bid to procure 1000 MW of base load

pow er (round the yea r) throug h Ca seI. The a lloc a tion of the

c apac ity am ong three Disc oms wa s p rop osed as unde r:

Jaipur VVNL 360 MW 36%

Ajmer VVNL 360 MW 36%

Jod hp ur VVNL 280 MW 28%

6. The pet itioner op ted for single sta ge b id p roc ess. The Req uests for

Prop osa l (RFP) fo r selec tion of sellers in line w ith the Sta nd ard Bidd ing

Doc ument (SBD) approved by the C entral Government w ere invited

throug h the follow ing news papers :


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7. Further, in order to generate a better response, tariff bids were also

advertised through electronic media by way of putting up details of

the p rojec t on RVPN website. The c om me nc em ent of sa le of RFP

document was from 25.2.2009 with the last date of submission of bid

as 1.6.2009. The RFP doc ument was revised in line with the SBD no tified

by Ministry of Power on 27.3.2009. The last d a te for sub mission w as

rescheduled to 21.7.2009. On request of the prospective bidders the

bid submission date was further extended to 06.08.09 wherein it was

ensured that the bidders are provided with at least 45 days for bid

submission. As per RFP the bidders were to submit their bids for the

requisitioned capacity of 1000 MW (+/- 20%) with a minimum bid

c ap ac ity of 100 MW.

8. Seve n p arties purc hased RFP doc ument of w hich the follow ing six

b idd ers submitted the ir b ids by the d ue d a te i.e 6.8.09.

S. No. Name of Bidde rs Cap ac ity Offered

1 Essar Power Limited 510 MW

2 Jind a l Ind ia Therma l Pow er Limited 450 MW

3 Relianc e Pow er Limited 1000 MW

4 Ad ani Pow er Ra jastha n Limited 1200 MW

5 RKM Powergen Pvt. Ltd . 300 MW

6 PTC Ind ia Limite d (Trad ing Licensee)

throug h the follow ing deve lop ers:

GMR Kamalanga Energy Ltd.

("Developer-1") Ind-Barath Energy (Utkal) Ltd.

("Developer-2")

KVK Nilanchal Power Pvt. Ltd.

("Developer-3")

Monnet Power Co Ltd

100 MW

200 MW

150 MW


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external member, directly or indirectly that could create potential

c onflic t o f interest. The eva lua tion c om mittee c om prised of the

follow ing memb ers :

(i) Sh. N. M. Mathur, CE(PPC&F) RVUN Jaipur.

(ii) Sh. R.K.Jain, Zona l CE,(O&M) JVVNL Jaipur

(iii) Sh. Deep ak Srivasta va , CCO A, RVPN Jaipur

(iv) Sh. B. K. Ma khija, Ad visor Projec t RVPN Jaip ur

(v) Sh. R. K. Kasliwa l, Dy CE (NPP&R), RRVPNL Ja ipur

(vi) Sh. A. K. Khand elwa l, CA Externa l Member (Financ ial Expert)

10. Besides, constituting the aforementioned BEC the petitioner also

appointed M/s Power Finance Corporation Consultancy Ltd. (PFCCL)as its consultants to evaluate the bids. BEC after serious deliberations

in series of meetings held on 7.8.09, 28.8.09, 7.9.09, 25.9.09 & 30.9.09

c onsidered the sta tus of a ll firms reg a rd ing Qua lific a tion Req uirem ents

(QR) and op ined as under :

It was stated by the consultants that based on the requirements of the

RFP (Meeting all the QRs on the bid deadline i.e. 06.8.09) strictly, only onebidder i.e. M/s RKM Power Gen Pvt. Ltd. offering 300 MW power, meets

QR. The c om mittee is of the op inion tha t suc h a situa tion will lea d to

annulment of the bid process, which may not be in the interest of the

Sta te. In view of this it w as c onsidered approp ria te to have some

relaxations in few c ond itions of QR and other co mp lianc es. How ever, the

relaxations in the terms of QR, which ma y a ffec t the c om missioning o f the

projec t/ ava ilab ility of the po wer to the state, should not b e c onside red .

11. The BEC the refo re recom me nded tha t the p rice o ffers of fo llow ing

firms ma y be c onsidered for ope ning:


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12. The p etitioner before ac c ep ting the rec om mendations of BEC

considered in detail the provisions laid down in the guidelines, RFP

document and decided that consultant should give their firm

recommendation through the BEC on the deficiencies/deviations

pointed out in the b ids. The releva nt extrac t of the me eting o f the

Boa rd of Direc tors of p etitioner held o n 20.10.2009 a re q uoted below :

The Boa rd d isc ussed and deliberated on the issues and dec ided tha t

consultants should give their recommendation through the BEC on the

deficiencies/deviations pointed out in the bids received, clearly

indicating there in the nature of deficiencies/deviations as major or

minor, keep ing in view their comp at ib ility w ith the p rovisions in the tend er

doc uments and sugg est the future c ourse o f ac tion to ensure transparent

b id p roc ess.

13. The BEC subseq uently sub mitted fo llow ing op tions and

rec om mended the o p tion (b)a s below in tune w ith its ea rlier dec ision:

a ) Proceed further with the single bid which is meeting the

qua lifying requirem ent stric tly as per RFP but for 300MW only.

b ) Consider the minor deficiencies/deviations as recommended

by the consultant.

c ) Consider to d rop the te nder and re-invite.

14. The p etitioner dec ide d to a cc ep t the rec ommenda tions of BEC to

ignore minor deficiencies in the Qualifying Requirements on the

follow ing g round s :

(i) The fresh bidd ing m ay de lay the proc ess of selec tion of the p ow erplant developers and hence will delay in commissioning of the plant

and supp ly of p owe r to the Sta te w hic h ma y lea d to pe rsistent p owe r

shorta ge in the Sta te .

(ii) Othe rs Sta tes have a lso initiated p roc urem ent of p ow er throug h c ase-1 bidding process. Further, the number of bidders/developers in the

country are limited, therefore, if we annul the process, the capacity

offered to us in the p resent b id w ill ge t unloc ked and m ay be o ffered


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provided by the deve loper @ Rs. 30lac s per MW and initiate fresh b id

p roc ess.

15. Accordingly the financial bids of the aforementioned qualified

bidders were opened on 1st December 2009 in the presence of

qualified bidders.

16. Based on evaluation of the Financial Bids submitted by all the

qualified bidders, the Bid Evaluation Committee on 3rd December

2009 recommended M/s Adani Power Rajasthan Limited as the lowest

evaluated bidder at a levellised tariff of Rs. 3.2483 per kWh for

procurement of total offered capacity of 1000 MW, as approved by

the Commission, plus additional 200 MW (subject to approval of the

Commission).

17. The rec ommend ation of the Bid Evaluation Co mm ittee wa sconsidered by the petitioner and the representative of M/s Adani

Power Rajasthan Limited was called to extend some commercial

reb a te in view of the supp ort being e xtende d to them by the Govt. of

Rajasthan. M/s Adani Power Rajasthan Limited agreed to extend a

rebate of one paise per kWh in the quoted non-escalable capacity

c harge for the ent ire term of the quoted term o f 25 yea rs. Thelevellised tariff on account of the discount offered works out to Rs.

3.2383 per kWh. The rec om mend ation o f the Bid Eva lua tion

Committee, the negotiated offer of M/s Adani Power Rajasthan

Limited the successful bidders and procurement of additional

quantum of 200 MW, subject to approval of the Commission, was

ap proved b y the p etitioner.

18. Ac c ord ingly, Let ter of Intent (LoI) wa s issued to Ad ani Pow er Ra jastha n

Limited (Suc c essful Bidd er) on Dec em ber 17, 2009 for supp ly of long

term 1000 MW, which was approved by the Commission, plus

additional 200 MW (subject to approval of the Commission although


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20. In compliance to the provisions of clause 6.2 of the Guidelines, the

pet itione r has furnished nec essary c ertifica tion o f BEC on c onfo rmity o f

the bid process evaluation according to the provisions of the RFP

document and certification of procurer on conformity of the bid

process with the Guidelines.

21. In c om plianc e to the p rovisions of c lause 6.3 of the Guidelines, for the

purpose of transparency, the petitioner has made the bids publicthrough public notice published in leading news papers i.e. Dainik

Navjoyti on 24.2.10, Times of Ind ia & Hindusta n Time s on 25.2.10. The

public notice me ntioned tha t M/ s Ad ani Pow er Ra jasthan Limited has

won the bid with the evaluated levelised tariff of Rs. 3.2383/kWh and

an anonymous comparison of all other bids together with the details

of PPA signed is ava ilab le on the w eb site o f RVPN.

22. The b id p roc ess (From da te of issue of RFP on 25.02.09 to signing of

PPA & RFP documents on 28.01.10) has taken 337 days. Whereas as

per guide lines the p roc ess should ha ve been c om pleted in 195 da ys.

As per c lause 5.19 of the Guidelines, ap prova l of Hon b le Co mmission

is req uired under c lause 5.16 of the Guidelines, in c ase the b id p roc ess

ta kes mo re than 195 da ys.

23. The list o f events with their da te of o c currenc e in the b idd ing p roc ess

are a s under:

S.No. Events Dt. as per

RFP

Date

(actual)1 Intima tion of b id p roc ess

to RERC

19.08.08

2 Ap prova l of Qua ntum 3.11.08

3 Da te of issue of RFP 25.2.09 25.2.09

4 RFP bid b i i 12 3 09 01 06 09


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11 Certificate by bid

eva luation committee

11.2.10

12 Certific a te by p roc urersJa ipur Discom

Ajme r Discom

Jod hpur Disc om

22.2.10

11.2.10

15.2.10

13 Pub lic not ice in new s

papers & website

25.02.10

14 Pet ition filed for adop tion 25.02.10

24. The c hrono log y of events as per guide lines with the ir sc hed uled da tes

/ ac tual are a s under:

Event Time line

as per

guidelines

Scheduled Ac tual Exc ess

time taken

Date ofissue of RFP

Zero da te 25.2.09 (Zerodate)

25.2.09 --

RFP bid

sub mission

75 days 10.5.09 6.8.09 86 days

Bid

evaluation

& Issua nc e

of LoI

100 days 4.6.09 17.12.09 108 days

PPA

becomes

effective

120 days 24.6.09 28.1.10 22 days

216 da ys

Filing of Petition for ap prova l of Bid Price and related issues:25. The p etitioner filed a petition b efore the Comm ission to approve the

bid p ric e a s req uired in sec tion 63 of the Ac t.

26. Even b efore the petition w as filed , Commission rec eived a c op y of a


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forge d one a nd tha t a rep ort has be en filed at the loc al po lic e station

in tha t respec t. He requested to ignore tha t letter.

27. The Com mission ha d pointed out to the petitioner c ertain ga ps of

information in the petition and non availability of supporting

documents with the petition and to explain the facts through a

representative. Meanwhile it received a letter dated 14.3.2010 from

M/s Reliance Power Ltd. which was also a bidder representing that

large scale discrepancies/deviations are evident from the evaluationreport of the bid evaluation committee wherein the qualification

requirement with respect to land has only been considered as a

c ritica l fac tor for c om missioning o f any po wer p rojec t. The C ompany

further alleged that the procurer has favoured the successful bidder

M/ s Ad ani Pow er Ltd . by w ay of qualifying it on the basis of imp orted

Coal where as the tariff submitted by the party is based on domesticCoal.

28. Simila rly anothe r bidder M/ s R.K.M. Power Gen Pvt. Ltd . rep resented

before the Commission that their firm has been deprived of the

contract even though they were the only bidder meeting all the

qua lifying req uirem ents.

29. The Co mmission in orde r to ensure the transparenc y in the p rocess,

invited comments of the petitioner on the representation of M/s

Reliance Power Ltd., and allowed both the representatives of M/s

Relianc e Pow er Ltd . and M/ s R.K.M. Pow er Ge n Pvt. Ltd . to participa te

in the hearing of the petition on 11.5.2010. During the hearing M/s

Reliance Power Ltd. stated that they have nothing more to submit

while RKM Power Gen Ltd. stated that they were deprived of the

contract even though they were the only qualifying bidder meeting

the req uirem ent o f guide lines stric tly. The lea rned c ounsel of M/ s RKM

Powergen Ltd. during the hearing said that relaxation cannot be


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regarding adoption of tariff which has also been the first bidding

process completed by or on behalf of distribution entities under the

guide lines of Go I issued on 27.3.2009 for Case-I bidd ing.

31. For unde rstanding the role a s we ll as approa ch to be follow ed in such

a matter, the Commission has also considered the following

observa tions in dec isions of APTEL and CERC:

(i) The APTEL in Appea l No.109/2009 he ld tha t:

20. While the b idd ing guidelines a llow the role o f the Sta te

Commission to be only ministerial for the adoption of tariff when

there is mo re than one b idder, there is a spec ific reference to the

consent in c ase of sing le b id . This va ria tion d eno tes tha t

adoption is routine and consent is the outcome of the

p roa c tive c onsideration.

(ii)The CERC in pe tition 18/2007 ha s he ld tha t :15. It is evident from the guidelines that in contrast to the

elab orate role o f the Comm ission in the ta riff dete rmination und er

Sec tion 62 of the Ac t, its role in c ase of ta riff d isc ove ry through

the com petitive b idd ing p roc ess unde rtaken unde r Sec tion 63 is

essentially confined to adoption of tariff, on being satisfied that

transparent p roc ess of b idd ing in acc orda nc e w ith the guidelines

have been followed in determination of such tariff. Whileadopting the tariff discovered through the competitive bidding

process, the Commission is not required to go into the merits or

analysis of the tariff so discovered. Neither is it possible for the

Commission to do so as not supporting details are required to be

subm itted b y the bidd ers .

32. Obviously the role of the Commission is essentially of being satisfiedtha t transparent p roc ess of b idd ing in ac c orda nce w ith guide lines has

been follow ed in ta riff disc ove ry. The Co mm ission ha s, ac c ording ly,

de c ide d to follow the p rinciple laid d ow n in the a bo ve referred orde rs

to the effect that adoption is a routine exercise to arrive at


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time the issues relevant to transparency of the process and

adherence to guidelines by the procurer have been given due

consideration.

34. As far as rep resenta tion o f M/ s. Reliance Pow er Ltd . is c onc erned , the

ma in issue, which emerges relates to the a lleg ed deviation, which has

been ignored by the procurer in qualifying some bidders for opening

of p ric e b id . In the rep resenta tion filed by the pa rty it has been

argued that procurer should have either sought approval of theCo mmission und er c lause 3.4.1 of RFP or else c anc elled the b id.

35. It may b e m entioned that Bid Evaluation Com mittee b ased on fac ts

and circumstances, as narrated in para 10 came to the conclusion

that some of the deviations, being of minor nature and not likely to

affect commissioning of projects, need to be ignored, as otherwise

only one bidd er would qua lify for ope ning of p ric e b ids and that to o

for 300 MW as aga inst 1000 MW ind ica ted in the b id doc ume nt. They

c ame to the c onc lusion tha t to a void re-b idd ing, which would result in

loss of time, minor deviation could be ignored for getting power in

time.

36. They acc ordingly op ined tha t the p rice b ids of the p arties mentionedin para 11 meeting by and large the major qualification requirements

with minor deviations may be opened. When confronted with the

situation as emerged in the instant case, Bid Evaluation Committee

while finalising its first recommendation visualised two options i.e. the

annulment of the b id p roc ess, which they thought would not b e in the

inte rest of the Sta te a nd the o ther op tion being som e relaxa tions infew c ond itions of q ua lifying req uirements without a ffec ting the time ly

commissioning of project and availability of power, which they

c onside red ap propriate .

37 Si Bid E l i C i d id d d f i


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qualified bid; even in that situation permission of Commission under

clause 3.5.1 of RFP read with para 5.7 of guidelines is required only if

the procurer still wants to proceed with a single bid. BEC considered

only two o p tions i.e. relaxa tion in som e d evia tions considered minor or

c ancella tion o f the p roc ess, which in their op inion w as within amb it o f

the guide lines.The o ther issue o f the sa id p arty rega rd ing canc ella tion

of the p roc ess a t tha t stage and invita tion o f fresh b id has been dea lt

with late r in this orde r while a rriving a t the final view on the m atte r.

38. It may be mentioned that there is no provision in the guidelines or in

the RFP document for the Commission to grant mid-course approval

on any deviation except in the single bid situation and prior approval

of the Com mission envisaged in the guide lines in respec t of d evia tions

is req uired before doc uments a re issued for inviting o ffers. This

observation is being made with reference to the point raised by thelearned counsel of M/s RKM Powergen Pvt. Ltd., that the relaxation

c ould b e g ranted only by the Comm ission.

39. The o ther imp ortant p oint raised by the p arty relates to relaxing the

qualifying requirements for the fuel in case of M/s. Adani Power

Ra jastha n Limited . This ma tte r has been elab orately dea lt with in the

first rep ort of the Bid Eva lua tion Com mittee , who found the p arty to b equalified as far as requirement for fuel is concerned based on tie-up

for imported coal and at the same time found the option of use of

do mestic c oa l wo rth conside ration on a c c ount of likely ad vanta ge of

lower escalation in tariff for domestic fuel than that of imported coal.

The p roc urer has subseq uent ly taken und ertaking from the b idd er that

lower escalation in two situations i.e. domestic coal or imported coalwould be applied in tariff and by this they have tried to derive

advantage of incurring low er fuel esc a la tion cost. It ma y be

mentioned that neither the guidelines of GoI nor the bid documents

anticipate such a situation w herein imp orted c oa l and domestic c oa l


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approva l of the Comm ission in a single q ua lified bid situa tion and tha t

the Commission would have necessarily accorded permission to the

procurer to proceed further on single bid and also that the quoted

rate would have been accepted without judging the reasonability

and ma rket rate . It ma y be mentioned that the need for

Commissions approval in such a situation arises only when procurer

dec ides to p roc eed further on a single b id . The p ric e b id of the party

wa s in any ca se o pened with their quoted ra te, when leve lised , being

Rs. 4.3043/ kWh a s aga inst the ra te of Rs. 3.2483/ kWh o f M/ s Ad ani

Pow er Ra jasthan Ltd ., ac c ep ted by the Proc urer.

41. The Co mm ission wo uld no w like to dea l with the ma in issue, which has

arisen in the matter through the representations or otherwise i.e. the

so-called deviations and its implications on transparency and

c om pliance o f guidelines of Go I.

42. As has been mentioned earlier, when the technical bid was opened,

it transpired that only one bidder was fully compliant if the qualifying

criteria was applied strictly and that too for a capacity of 300 MW as

aga inst a tend er enq uiry of 1000 MW. Based o n the fac ts and

c ircumstanc es the eva luation co mm ittee c am e to the c onc lusion tha t

some relaxations, which may not affect commissioning of projects ofbidder may be considered and accordingly they found following

parties meeting the major qualifying requirements and opined that

their pric e bid c ould b e op ened :

1. M/ s RKM Powergen Priva te Limited

2. M/ s Jinda l Ind ia Therma l Power Limited

3. M/ s Ad ani Pow er Ra jastha n Limited

4. M/ s PTC Ind ia Power Limited (Trad er), thru.

(i) M/ s GMR Kama langa Energy Limited

(ii)M/ s Ind Bara th Energy (Utka l) Limited

43 The matte r wa s c onsidered by the Boa rd of RVPN in its mee ting he ld


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44. Bid Eva lua tion Committee a ga in ga ve its rep ort and p ointed o ut that

there are following three options in the matter and they again

reitera ted their op inion in favour of opt ion-(b) g iven b elow:

a ) Proc eed further with the single b id which is me et ing the

qua lifying requirem ent stric tly as per RFP but for 300MW only.

b ) Consider the m inor de fic ienc ies/ deviations as rec om mende d

by the consultant.

c ) Consider to d rop the te nder and re-invite.

45. The m atte r wa s aga in c onsidered by the Boa rd of RVPN in themeeting held on 3rd December, 2009 and the Board decided to

ignore minor deficiencies in the qualifying requirements on the

ground s g iven in p ara 14 of this orde r.

46. It is apparent tha t Bid Eva lua tion Co mm ittee c onsistently held the view

that some deviations being of minor nature need to be ignored in the

la rger interest of ge tting pow er. The same wa s c arefully co nsidered

by the Boa rd in two meetings and finally ac c ep ted . The Boa rd in its

decision has also given justification and reasons for ignoring minor

deficiencies/deviations in consideration of the objectives of the

guidelines.

47. Based on the said decision the price bids were opened and M/s.Adani Power Rajasthan Limited was declared as successful bidder.

The rates quoted by various parties whose p rice b ids were op ene d

are a s under:

1. M/ s Ad ani Power Ra jasthan Limited Rs. 3.2483/ kWh L-1

2. M/ s PTC Ind ia Power Limited (Trad er), thru.

(i) M/ s GMR Kamalanga Energy Limited Rs. 3.8107/ kWh L-2

(ii) M/ s Ind Barath Energy (Utkal) Limited Rs. 3.9520/ kWh L-3


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49. The pet itioner a lso submitted tha t Maharashtra has rec ent ly finalized

the b id rec eived on 7.8.2009 as under:

Bidd er Pow er Offered Levelised Tariff

1. EMCO 200 MW Rs.2.88

2. Ind ia Bulls 450 MW Rs.3.26

3. Adani Power 1200 MW Rs.3.28

50. In view of the above facts, the lowest quoted tariff accepted by the

procurer is quite competitive when compared with prevailing rates

and m ore so w ith cost of pow er landed in the Sta te.

51. The Bid Eva lua tion Comm ittee ha ve g iven the c ertifica te , as req uired

in the guidelines that bid evaluation process has been carried out in

c onformity with the p rovisions of RFP doc ument. Simila rly c ertifica tes

have been furnished to the Commission by the Chairman of threeDiscoms as well as Managing Directors to the effect that bid process

has bee n c arried out in confo rmity w ith guidelines issued by GoI. The

Commission has noted that this is the first case of bidding process

under Case-1for which no past experience is available for which the

petitioner has utilised the consultancy services of a central public

sec to r fina nc ial institution i.e. Power Financ e Co rpora tion (PFC). Thepetitioner took the decision after detailed deliberation in the Boards

meeting with due consideration on recommendations/views of PFC

and the Bid Eva luat ion Com mittee .

52. The Com mission a fter careful considerat ion of the fac ts and

circumstances of the case; the reasons recorded by both Evaluation

Committee as well as Board of RVPN for coming to the conclusionthat deviations are minor and should be relaxed/ignored, which in

their view , did not a mount to non-ad herenc e to guidelines and they

have so c ertified before the Comm ission a nd c onsidering tha t the ra te

arrived at is highly competitive and reasonable; is satisfied about the


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54. Based on the forgoing consideration and facts produced, we are

satisfied that the tariff discovery under Case-1 bidding process is

transparent and is in adherence with the guidelines of GoI.

Accordingly the tariff quoted by the lowest bidder by M/s Adani

Power Rajasthan Ltd. And given at the annexure-I, levelisied Rs.

3.2483/kWh with reduction of 1p/kWh as finally agreed is hereby

adop ted u/ s 63 of the Ac t for supp ly to p roc urer Disc om s in the sha re

on perc entage ba sis as at p ara 5 ab ove and shall be c harged as pe r

PPA exec uted on 28.1.10.

Quantum o f Power:

55. The p et itione r s p rayer is for allow ing 200 MW ad d itiona l power ove r

and a bove 1000 MW ap proved by the Com mission. It wa s submitted

by the petitioner that the standard bid documents has the standard

stipulation of + 20% power and hence additional 200MW can beproc ured . The p roc urer Disc om s have a lrea dy g iven the ir c onsent fo r

procurement of this additional power. In support of its justification the

petitioner submitted that firstly the tariff discovered is reasonable.

Sec ond ly, there a re slipp ages in the a va ilab ility of pow er from va rious

Central Sec tor Pow er Sta tions env isaged in XI p lan a nd have slipp ed

to XII plan period . The Co mm ission ha d ea rlier co nsidered theava ilab ility of p ow er from these Ce ntral Pow er Sta tions while a rriving

a t the q uantum o f powe r to b e p roc ured as 1000MW. The to ta l

slippages being to the extent of 1395 MW of which 220 MW capacity

has go ne o ut to p riva te sec tor from which a va ilab ility is uncertain.

56. Looking the submissions made as above, the additional purchase of

200 MW power being permissible under the standard bidding RFPdo cument, is ap proved.

Approva l of Delay:

57 The p et itione r submitted tha t the b id p roc ess was initiate d throug h


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in the b idd ing p roc ess. It has been brought out by the pe titioner tha t

revised escalation factors were notified by CERC finally on 29.7.2009

hence the date of issue of RFP though was 25.2.2009, the bid

submission d a te had to be extended up to 6.8.2009. Thus this delay of

86 day, if ignored, lea ds to a delay o f 55 da ys p rima rily on a c c ount o f

the case being first of its kind requiring various clarifications by the

bidders and review of e va luat ion rep ort be fore fina liza tion.

58. The pet itione r further submitted tha t since the likely sc hed ule for thecompletion of bid process as per the RFP document was of 187 days,

as could be seen from the table below, which is well within the limit

stipulated in the guidelines, hence the advance approval of the

Commission to meet the requirement of para 5.16 of the bidding

guide lines was not soug ht:

1 Da te of issue of RFP 25.2.2009

2. Cla rifica tion by b idd ers 12.3.2009

3. Pre b id mee ting of required 23.3.2009

4. Revision in RFP 15.4.2009

5. Non Financ ial b id op ening 8.6.2009

6. Financ ial Bid Opening 30.7.2009

7. Issue of LOI 10.8.2009

8. Signing of RFP 31.8.2009

59. Looking to the facts and circumstances submitted by the petitioners

the effective delay of 55 day has in no way affected the tariff

d isc overy though transparent p roc ess. In view of the a bove , the to ta l

delay of 142 days in the b idd ing p roc ess is being a llow ed .

Conclusion

60. In the light o f the p osition d isc ussed in the p rec ed ing p aragrap h the


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adopted tariff shall be charged in accordance with PPA signed

on 28.1.2010.

(c ) Approves the procurement of additional 200 MW of base load

pow er offered by the Suc c essful Bidd er (M/ s Ad ani Pow er

Rajasthan Limited) at the adopted tariff on the same terms &

conditions.

61. The p et ition is d isposed of a c c ording ly. The c op y of the orde r ma y be

sent to Sta te Go vt., CEA, pet itione r and Disc om s and parties whohave rep resented before the Comm ission.

(S.K.Mitta l) (K.L.Vyas) (D.C. Samant)

Mem be r Mem be r Chairma n


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order adoption of tariff adani

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