The Gazette of India

EXTRAORDINARY
PART I - Section 1
PUBLISHED BY AUTHORITY
Ministry of Power

New Delhi,
Dated the [**]
RESOLUTION
No. [**]

Guidelines for determination of Tariff through transparent process of bidding for

procurement of power from Ultra Mega Power Projects (UMPPs) based on allocated coal
linkage and to be set up on Build, Own and Operate (BOO) basis on Supercritical
Technology

1. Preamble

1.1 In order to promote competition in the procurement of power through a competitive and
transparent process, the Central Government has, after extensive consultation with
stakeholders and experts, evolved a model contractual framework for the procurement of
power on a long-term basis for a minimum period of 25 years, by the distribution
licensees or the body authorized by the State (“Procurers”) from power producers who
agree to construct and operate Ultra Mega Power Projects (UMPPs) sourcing coal from
allocated coal linkage on a „Build, Own, Operate‟ (BOO) basis.

1.2 The development of UMPPs is an initiative of Government of India with the support of
Central Electricity Authority (CEA) as the Technical Partner and Power Finance
Corporation Ltd. (PFC) as the Nodal Agency.

1.3 For the purposes of UMPPs sourcing coal from allocated coal linkage, these Guidelines
shall replace the earlier Guidelines notified by the Central Government vide notification
No. 23/17/2011-R&R(Vol-V) dated 21st September 2013.

2. Scope of the Guidelines

These Guidelines are being issued under the provisions of Section 63 of the Electricity
Act, 2003 and shall govern the bidding process to be conducted by the Procurers for
procurement of power from location specific UMPP sourcing coal from allotted coal
linkage.

3. Preparation for inviting bids

3.1. The procurement shall be through a combined bidding process through the Authorized
Representative. The Authorized Representative may be one of the Procurers or the

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 Operating SPV to be incorporated in terms of paragraph 3.3 below, or any other entity
authorized by the Procurers. The Authorized Representative would be authorized by the
Procurers to undertake necessary Project development activities and to conduct on their
behalf the bidding process for selection of Developer for the UMPPs and to take all
necessary actions as may be required for such selection and matter incidental thereto. The
cost for the bidding process including the Project development activities shall be initially
paid by the Procurers to the Authorized Representative. The said cost shall be recovered
from the successful bidder. For such combined procurement, the Procurers shall execute a
joint agreement prior to initiating the bidding process.

3.2. The provisions of these Guidelines shall be binding on the Procurers. To carry out the
bidding process expeditiously, the following conditions shall be met by the Procurers:

(i) The bid documentation shall be as per the Request for Qualification (“RFQ”),
Request for Proposal (“RFP”) and the Power Purchase Agreement (“PPA”)
(collectively the “Standard Bidding Documents”) issued by the Central
Government in terms of these Guidelines.

(ii) Approval of the Central Government shall be sought in the event of deviations from
the Standard Bidding Documents and/or conditions/provisions given in these
Guidelines.

3.3. In order to ensure timely commencement of supply of electricity, the following project
preparatory activities shall be completed by the Procurers prior to issuance of RFQ:

Incorporation of the SPVs: Two Special Purpose Vehicles (SPVs) namely the Operating
SPV and the Infrastructure SPV shall be incorporated by the Nodal Agency1.

(i) Fuel Arrangement: The Procurers shall obtain in the name of the Operating
SPV, a Letter of Assurance from the coal supplier for the supply of coal on a
linkage basis for the entire duration of the PPA2, for being used and utilized
exclusively for the purposes of the Project

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The objective of the two SPVs shall be as follows:

(a) The Operating SPV: The Procurers shall require the successful bidder selected through the bidding process as
enumerated under paragraph 4 to develop the Project through the Operating SPV. To enable this, the Procurers
shall obtain all the approvals required for the Project as listed in paragraphs 3.3, 3.4 and 3.5 herein and shall
transfer the Operating SPV to the successful bidder.

(b) The Infrastructure SPV: The land required for the construction of the Power Station shall be held in the name
of the Infrastructure SPV. The Infrastructure SPV shall be transferred to the Procurers at the end of the bidding
process and the land required for the Power Station shall be leased by the Infrastructure SPV to the Operating
SPV/Seller. Further, the Operating SPV and the Coal Supplier shall execute Fuel Supply Agreement in
accordance with the draft PPA.
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Shall also cover the period for which the terms of the PPA gets extended.

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 (ii) Environmental Clearance for the Power Station: Rapid Environmental Impact
Assessment (EIA) Report for Power Station should be made available.

(iii) Water linkage: The Procurers shall obtain the in-principle approval for water
linkage required for the Project in the name of the Operating SPV.

3.4. The following activities shall be completed by Procurers prior to issuance of RFP:

(i) Site identification and Land Acquisition for the Power Station: The Procurers
shall identify the total land required for the Project and procure the
pronouncement of an award under Section 23 of the Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
or any other applicable law in the name of the Infrastructure SPV for the land
which shall be critical for achieving the COD of the Project. The critical land
shall be defined by the Procurers on case to case basis.

(ii) Environmental Clearance for the Power Station: The requisite proposal for the
Environmental Clearance for Power Station in the name of the Operating SPV
should have been submitted before the concerned administrative authority
responsible for according final approval.

(iii) Forest Clearance (if applicable) for the land for the Power Station: Requisite
proposal for the Forest Clearance in the name of the Operating SPV should have
been submitted, to the concerned administrative authority responsible for
according the final approval.

(iv) Connectivity and Long Term Open Access: Application for Connectivity and
Long-term Access in the name of the Operating SPV should have been submitted
to the CTU in accordance with the CERC (Grant of Connectivity, Long-term
Access and Medium-term Open Access in inter-State Transmission and related
matters) Regulations, 2009.

(v) Compilation of requisite Hydrological, Geological, Meteorological and

Seismological data and preparation of a Detailed Project Report (DPR) for
Power Station: The bidders shall be well advised to verify the data through their
own sources, as the risks would lie with the Operating SPV/Seller.

3.5. The following activities shall be completed by Procurers prior to signing of the PPA:

(i) Lease of Land for the Power Station: The Infrastructure SPV shall transfer the
critical land for the Power Station, except the forest land unless the same is
available, on a lease basis to the Operating SPV for a period which is lower of (i)
99 years or (ii) the maximum period as may be permitted by the relevant State
Government. Further, all actions for the remaining area of the total land required
for the Power Station including the Rehabilitation & Resettlement (R&R)
obligations for the total land for Power Station shall be that of the Operating

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 SPV/Seller. It is hereby clarified that the remaining area of the land shall be
acquired by the Operating SPV/Seller in the name of the Infrastructure SPV
which in turn shall be leased to the Operating SPV/Seller for a for a term which is
co-terminus with that of the lease of the critical land. Even after the expiry of the
PPA on account of efflux of time, the lease of the land for the Power Station shall
continue to subsist until its expiry or termination as per the terms contained in the
land lease agreement. The land usage under the land lease agreement shall always
be only for the generation of power. Following the expiry of the lease agreement,
the power station shall be dismantled and vacant land shall be returned to the
Infrastructure SPV, without any encumbrances

(ii) Environmental Clearance for the Power Station should have been obtained in the
name of the Operating SPV.

(iii) Stage I Forest Clearance for the Power Station should have been obtained in the
name of the Operating SPV.

3.6. The Procurers and the Seller shall mutually within 6 (six) months of the Effective Date of
the Power Purchase Agreement appoint a consulting engineering firm to be the
Independent Engineer for the project.

3.7. The Procurers shall prior to the issuance of RfQ for a specific UMPP, in consultation
with the Ministry of Power decide and inform the bidders about the applicability of the
provision or exemption from the applicability of the RGO compliance provisions.

4. Bidding Process

4.1. A two-stage bidding process featuring separate RFQ and RFP stages shall be adopted.

4.2. The Procurers shall accord wide publicity by publishing the RFQ notice in at least two
national newspapers and at least one international newspaper and also onthe website of
the Nodal Agency. The bidding shall necessarily be conducted by way of International
Competitive Bidding (ICB). For the purpose of the RFQ, minimum conditions to be met
by the bidders shall be specified by the Procurers in the RFQ .

4.3. Bidders who have qualified at the RFQ stage shall be eligible to participate in the RFP
stage.

4.4. The Procurers shall provide written interpretation/clarifications of the Bidding

Documents to all the bidders.

Wherever revised Bidding Documents/ amendments are issued, the Procurers shall
provide bidders at least 15 days after issue of such documents for submission of the
Application/Bids.

4.5. The following shall be notified and updated by CERC every year:

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 (a) Escalation rate for non-fuel component of the Variable Charge for payment purpose.

(b) Discount rate to be used for Bid Evaluation.

4.6. Bid Submission and Evaluation

4.6.1. To ensure competitiveness, the minimum number of qualified bidders should be at least
two other than any affiliate company or companies of the Procurers. If the number of
such bidders responding to the RFQ is less than two, then the bidding process shall be
annulled.

4.6.2. The Procurers shall constitute a Committee for evaluation of the Bids with at least one
member external to the Procurer‟s organisation and affiliates. The external member shall
have expertise in financial matters / bid evaluation. Keeping in view the different
expertise/skills required for evaluation of the RFQ and RFP bids, the composition of
members should differ in respect of the Committees being set up for the evaluation of
RFQ and RFP bids. However, the Chairman of both these Committees should be the
same. The Chairman shall reveal past associations with the Procurers and the Bidders -
directly or through affiliates - that could create potential conflicts of interest.

4.6.3. The bidder whose evaluated tariff as per the evaluation procedure is the lowest, shall be
considered as the successful bidder for the award. The Evaluation Committee shall have
the right to reject all the price bids if the rates quoted were not aligned to the prevailing
market prices.

4.7. Time Table for the Bidding Process

4.7.1. In the bidding process, (i) a minimum period of 45 days shall be allowed between the
publication of RFQ and last date of submission of responses to RFQ and (ii) a minimum
period of 150 days shall be allowed between the issuance of RFP and the last date of RFP
Bid Submission.

The timetable for the bidding process is indicated in Annexure-I.

4.7.2. In normal circumstances, the bidding process is likely to be completed in a period of 300
days, but the Procurers may give extended timeframe than indicated in Annexure-I.
However, if the bidding process is likely to take more than 730 days, approval of the
Central Government shall be obtained

5. Contract Award and Conclusion

5.1. After conclusion of the bidding process the Procurers and the Evaluation Committee shall
provide a certificate on the conformity of the bidding process to these Guidelines.

5.2. The Procurers shall sign the PPA with the Operating SPV.

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5.3. For the purpose of transparency, the Procurers shall make the Bids public by indicating
all the components of tariff quoted by all the bidders. While doing so, only the name of
the successful bidder shall be made public and details of tariffs quoted by other bidders
shall be made public anonymously.

5.4. The Procurers shall also make public the PPA. For this purpose, a notice shall be
published in at least two national newspapers and full details shall be posted on the
website of all the Procurers for at least thirty days.

5.5. The signed PPA along with the certification provided by the Evaluation Committee and
by the Procurers as provided in paragraph 5.1 shall be forwarded to the Appropriate
Commission for adoption of Tariff in terms of Section 63 of the Act.

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 Annexure-I: Time Table for the Bidding Process

Sl.No. Activities to be completed before Event Elapsed

Event in next column takes place Time from
Zero date
1. - Environmental clearance: Rapid Publication of RFQ Zero date
EIA Report for Power Station
should be available.
- Fuel arrangements: Letter of
Assurance from the coal supplier
in the name of the Operating SPV
- In principle approval for Water
linkage should be available.
2. - Submission of Responses of 45 days
RFQ
3. - Award under Section 23 of the Issuance of RFP 75 days
Right to Fair Compensation and
Transparency in land Acquisition,
Rehabilitation and Resettlement
Act, 2013 or other applicable law
for the portion of Land that is
critical for achieving COD of the
Project.
- Environmental Clearance: The
proposal for Environmental
Clearance for Power Station
should have been submitted
before the concerned authority
responsible for according final
approval.
- Forest Clearance (if
applicable):Requisite proposal for
Forest Clearance for the land for
the Power Station should have
been submitted before the
concerned authority responsible
for according final approval.
- Connectivity and Long Term
Open Access: Application for
Connectivity and Long-term
Access should have been
submitted to the CTU
- Data: Compilation of requisite
Hydrological, Geological,
Meteorological and Seismological
data and preparation of Detailed

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Sl.No. Activities to be completed before Event Elapsed
Event in next column takes place Time from
Zero date
Project Report (DPR) for Power
Station.
4. - Bid conferences etc. -
5. - Final clarifications/amendments *
6. - RFP bid submission 225 days
7. - Evaluation of bids and issue of 240 days
LOA
9. Transfer of Infra SPV to 300 days
Stage I Forest Clearance and Procurers and execution of the
Environmental Clearance for the following Agreements:
Power Station should have been
obtained prior to signing of the i) Share Purchase Agreement
Power Purchase Agreement. ii) Default Escrow Agreement
and the Agreement to
Hypothecate cum Deed of
Hypothecation,
iii) Land Lease Agreement for
critical land,

iv) Power Purchase Agreement

*In case of any change in RFP document, the Procurers shall provide bidders additional time in
accordance with paragraph 4.4.

Note: It is clarified that if the Procurers give extended time for any of the events in the bidding
process, on account of delay in achieving the activities required to be completed before the
event, such extension of time shall not in any way be deviation from these Guidelines.