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Rajasthan scraps power project tenders won by BHEL
Mon, 30 Apr 2012 00:01:00 +0530
Business Standard Economy Policy News

The Rajasthan government has scrapped tenders worth Rs 12,000 crore that were bagged by Bharat Heavy Electricals Ltd (BHEL) more than a year before for two separate thermal power projects in the state.

Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUN), a state government company, has scrapped EPC (engineering, procurement and construction) tenders for the upcoming supercritical units of the Suratgarh and Chhabra thermal power stations, sources said.

RVUN cancelled the separate tenders floated for two 660 Mw units each for Suratgarh and Chhabra, respectively, without specifying reasons, sources added.
When contacted, BHEL officials said no reasons had been assigned by RVUN for cancelling the tenders and the company was trying to get in touch with RUVN. BHEL had emerged as the lowest bidder for the Rs 12,000-crore worth tenders, sources said. The second lowest bidder was BGR Energy.

Calls and messages to RUVN chairman and managing director P N Singhal did not elicit any response. BGR Energy could not be reached for comments.

The cancellation letters were sent on April 25. The development comes at a time when BHEL is grappling with slowdown in its order book. Owing to an overall sluggishness in the power sector, the company's order book more than halved to Rs 22,096 crore in the last financial year, compared to 2010-11.

According to sources, though the tenders were finalised in January 2011, RUVN initiated price negotiations with BHEL only this January. There were extensive discussions between the two parties, sources added.

When the tenders were floated in November 2009 and opened in April 2010, there were three bidders BHEL, BGR Energy and Russia's Power Machines.

RUVN had invited international competitive bids for the two projects.

The tenders were for design, engineering, manufacture, assembly, testing at works, supply, civil structural and architectural works, erection, testing and commissioning of main plant and balance of plant on EPC basis.

The scrapping of the tenders would delay the two projects having total capacity of 2,640 Mw in Rajasthan, which is grappling with power shortage. At present, RUVN has an installed capacity of 4,097 Mw.
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