Petition No. 58 of 2007
Date of order: 2.01.2008

Nabha Power Limited (NPL) filed this petition on 03.12.2007 seeking approval of deviations from the Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by the Distribution Licensees (Guidelines issued by the Ministry of Power, Govt. of India through Notification No.23/11/2004-R&R Vol.II dated 19.1.2005) including subsequent amendments. The petitioner company has been incorporated under the Companies Act, 1956 as a wholly owned company of the Punjab State Electricity Board (PSEB) with its registered office at The Mall, Patiala. NPL is a Special Purpose Vehicle (SPV) for the establishment of a coal based thermal power plant of a contracted capacity in the range of 1080 MW -1320 MW to be set up at Village Nalash (near Rajpura), District Patiala (Punjab), India on build own and operate (BOO) basis (hereinafter referred to as the “Project”).

The Commission notes that the petitioner has sought approval for effecting certain deviations in the Standard Bid Document pertaining to Request for Qualification (RFQ). In addition, concurrence has also been sought to the deviations made in the time table for the bidding process. Furthermore, the petitioner has also prayed for approval to shift the site of the project from Nabha to Rajpura. The Commission has given its careful consideration to the grant of approval to the deviations keeping in view the provisions in clauses 3.1, 3.2, 5.16 and 5.18 of the Guidelines. The Commission’s findings on each deviation for which approval has been sought are discussed in the succeeding paragraphs:

The standard notice and RFQ documents require the procurer to enlist tasks completed before publication of RFQ. Clause 3.2 of the Guidelines further enumerates such tasks and stipulates the time by which these are to be completed. The tasks are:

1. Project site identification and acquisition of land required for the Project
2. Environment clearance for the Project
3. Fuel linkage
4. Water linkage for the Project”


1. The Guidelines prescribe that the notification under Section – 4 of the Land Acquisition Act ought to be issued before publication of the RFQ. The petitioner has sought approval of the Commission that the same be allowed to be issued before submission of RFQ by the bidders. The Commission observes that this notification does not have a direct bearing on the submission of RFQ by the bidders and as such allows the said notification to be issued within 45 days of the publication of the RFQ.

   Further, as per the Guidelines, notification under Section-6 of the Land Acquisition Act is required to be issued before issuance of the RFP. The petitioner has requested to allow this notification to be issued before submission of the RFP bids by the bidders. The Commission observes that with the publication of the notification under Section-6, the area to be acquired gets frozen and this information is an essential input for the bidders. The Commission is , thus, inclined to permit this deviation only to the extent that the Section 6 notification must be issued within 90 days of issuance of RFP.
   
   

2. EnvironmentalClearance:

   As per recent amendments in the Guidelines, the Rapid Environmental Impact Assessment (EIA) report should be available before the publication of the RFQ. The petitioner has submitted that the Rapid EIA Report will be available two months before submission of the RFP. Furthermore, the Guidelines require that the proposal for environmental clearance must also be submitted to the competent authority before issuance of the RFP whereas the petitioner has sought approval for submission of this proposal before receipt of RFP. The Commission observes that non-availability of the Rapid EIA report before publication of the RFQ would not in any way jeopardize the bidding process and accordingly allows this deviation with the stipulation that this report shall be forthcoming before the RFP is issued. In so far as submission of the proposal for environmental clearance to the concerned authority is concerned, the Commission appreciates that obtaining such clearance is a long drawn process which does not directly affect other time lines. Moreover, the stipulation for the environmental clearance proposal requiring submission before issue of RFP has been prescribed only recently in the amended Guidelines issued by the Ministry of Power on 27.9.2007. In the light of the above, the Commission allows the petitioner to submit the application for environmental clearance to the concerned authority within 60 days of issuance of the RFP.
   
   

3. Water Linkage:

   The Guidelines provide that water linkage should be available before the publication of the RFQ. The Petitioner has requested that the water linkage for the proposed power station be allowed to be firmed up before submission of RFQ. The Commission allows deviation in this respect to the extent that this activity be completed within 45 days of the publication of the RFQ.
   
   

4. Data for Detailed Project Report:

   The Guidelines require that the requisite hydrological, geological, meteorological and seismological data necessary for preparation of the Detailed Project Report (DPR) be made available before issue of RFP while the petitioner intends to do so two months before the submission of RFP by the bidders. The Commission is of the view that availability of the basic data is an essential requirement and any deviation on this account will be prejudicial to the bidding process. Accordingly, the Commission orders that the requisite hydrological, geological, meteorological and seismological data which is an essential input for preparation of the DPR be made available before issuance of RFP.
   
   

5. The Guidelines require that a minimum period of 150 days be allowed between issuance of RFP and the last date for submission of bids. It is also mentioned in the Standard Bid Documents that the period for commencement of supply by the successful bidder will ordinarily not be less than 48 months. The petitioner has requested that the minimum period in case of the former be reduced to 100 days while time prescribed for commencement of supply be brought down to 42 months. The Commission notes that it had given due consideration to both these issues while disposing of similar requests for permitting deviations in respect of these two stipulations while dealing with the petition filed by Talwandi Sabo Power Limited. The Commission had at that time not thought it fit to allow any deviation in either case and sees no reason to take a different view now.
   
   
6. The Commission had earlier allowed the Petitioner to contract capacity to the extent of 2400 MW based on 1200 MW each for the proposed power stations at Talwandi Sabo and Nabha. Thereafter in its Order dated 8.11.2007 in Petition No. 29 of 2007, the Commission had noted that the capacity of the project to be set up at Talwandi Sabo had been enhanced from 1200 MW to a contracted capacity in the range of 1620 MW – 1980 MW and had allowed the same. With the proposed capacity of 1200 MW of Nabha (now Rajpura), the total proposed capacity of the two power stations will get enhanced to 3000 MW which is 600 MW over and above what was earlier allowed by the Commission. As per the Guidelines, approval of the Commission is required to be sought if the quantum of energy to be procured exceeds the projected additional demand forecast for 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 (at the time of issue of RFQ) Electric Power Survey (EPS) published by Central Electricity Authority (CEA). The National Electricity Policy aims to achieve the objective of fully meeting the demand for electricity by 2012. It further aims at overcoming energy and peaking shortages and ensuring availability of adequate spinning reserve. The instant power plant is likely to be commissioned in 2012-13 and accordingly the power requirement in 2015-16 has to be kept in mind. The 17th E.P.S. has projected an annual compounded increase of 8.75% in energy requirements during the period 2006-07 to 2011-12. Assuming the same rate of growth, the energy requirements in 2015-16 will be 15385 MW whereas the energy available from all present and future sources including the instant case will be 13847 MW. In the light of this deficit, the Commission approves contracting of a total capacity of 3100 MW, taking both the proposed power stations at Talwandi Sabo and Rajpura into account.




sd/-	sd/-
(Satpal Singh Pall)	(Jai Singh Gill)
Member	Chairman



Chandigarh
Dated: January 9, 2008