The government will make international competitive bidding a mandatory condition to give bulk orders for power units using new supercritical technology. In order to encourage domestic manufacturing, the government will specify in the bidding tenders that the winners would have to put in place a phase manufacturing programme (PMP). A few days ago, the Cabinet Committee on Economic Affairs (CCEA) referred the issue of giving eight to 10 units of NTPC’s power plants (using supercritical technology) to public sector power equipment manufacturer Bhel to a group of ministers (GoM), headed by finance minister P Chidambaram.

While Bhel, along with its administrative ministry, wants NTPC to give it the bulk award for supercritical units (660mw/ 800mw), which in turn would allow it to absorb this new technology, the Power Ministry and NTPC are against such an award and want more companies to participate in the tendering process as they do not want to rely completely on Bhel.

Bhel has acquired this technology through strategic tie-ups with other companies and needs projects to gain expertise in this new area. It is learnt that the Cabinet is in favour of Bhel getting bulk awards. However, the matter that needed to be resolved was how to arrive at an appropriate pricing mechanism for these contracts and at the same time ensure that domestic manufacturing of such power equipment is encouraged.

The GoM asked a high powered committee, headed by Planning Commission member B K Chaturvedi, to look into the matter. According to the committee, which has sent its recommendations to both finance minister P Chidambaram and the Prime Minister’s Office (PMO), NTPC may initially go in for bulk tendering of, say, seven 660 mw units units with the caveat that the lowest bidder would get four such units. Bhel, which too is expected to participate in such a tendering process, would get all four units if it turns out to be the lowest bidder.

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