Bihar’s power bid gets no response yet

Patna: Bihar’s efforts to tackle the power crisis do not seem to work as planned. Bihar State Electricity Board’s (BSEB’s) decision to invite bids to purchase 300MW of electricity from the open market for a short-term period has not received any response from bidders so far.

BSEB on June 30, had invited bids for procurement of 300MW power on a short-term basis for a period of three months from September 1 to November 30, 2011. The last date for submission of bids is July 15 after which the bids would be opened.

If it materialises, the deal would provide the power-starved board relief in dealing with power problems, as electricity would be available instantly unlike the one in which the board has signed an agreement with Essar Power in July 2010, for the supply of 450MW of electricity for a period of 25 years from July 2014.

“There has been no response from bidders so far, but we expect they will come forward as there is a week left for submitting bids,” sources told.

The state is heavily dependent on the central sector allocation for power availability as its own power generation is barely about 150 to 200MW against the state’s peak demand of 2,500MW. The state normally receives about 1,000 to 1,300MW from the central sector against the scheduled allocation of 1,772MW. The allocation sometimes dips whenever there is crisis at National Thermal Power Corporation (NTPC) plants.

Of the allocated power from central quota, the state has to supply around 450MW to the capital and 350MW for essential services, which includes 60MW to Nepal (according to agreement with the central government), 90MW to the railways, 75MW to continuous process industries, 35MW to defence, airports, agriculture university, dairy and others. It also provides another 20MW to powerhouses, 20MW for the Buddha tourist circuit and about 50MW is lost in transmission.

Keeping these in mind, the board floated tenders for supply of about 1,050MW of electricity on a long-term agreement basis in January.

Of the eight power companies, which submitted their bids in request for proposals to purchase 1,050MW of electricity from the open market through competitive bidding, Essar Power’s bid is the lowest for supplying 300MW of power to the state.

“Essar Power has offered to sell 300MW to the state at Rs 3.69 per unit according to the long-term agreement plan for 25 years,” a senior BSEB official told The Telegraph, adding that the proposal might be placed in the board meeting in end-July where it would be ratified.

The board has planned to purchase 1,500MW of electricity under Case-I bidding in which the board would purchase power from the open market on a long-term agreement.

Under the Case-I bidding, the board has far signed power purchase agreement with Essar Power Jharkhand Limited for a supply of 450MW of electricity from its 1,200MW coal-based Tori I power project located in Latehar district of Jharkhand. Power would be available from July 2014. Even in the case of Essar, if the deal is signed to supply 300MW of power, it would be available from July 2015.