An Empowered Group of Ministers is likely to finalise the bidding norms for ultra mega power projects (UMPP), on 25 July 2013.

For the purpose, the Power Ministry has readied new standard bidding documents (SBDs) that will be applicable for projects where the fuel source is determined in advance, generally known as Case-II projects. Case-II projects will either have a captive mine attached to them or linkage will be provided from domestic mines.

As per SBDs that will be examined by the Empowered Group of Ministers, the bidder who offers the most efficient capacity charge and heat value will be the winner. The latest SBD has treated fuel cost as pass-through. Due to this, there will be no quotes for fuel charges. The capacity charge will be linked to depreciation and loan repayment. At the same time, it will be linked to the inflation index.

The proposed norms change the plants from a BOO model to DBFOT structure. This will not allow the lenders to create security on the land assets lending to unsecured loans.

Moreover, the power producer will be allowed to sell electricity in the market if the distribution utility does not want to pay for expensive imported coal or fuel procured through e-auction. Besides, the distribution company will have to pay for fixed charges if the power producer is not selling to other customers. The norm will also have capacity charge as a single parameter for competition.

In addition to this, the heat rate of the power plant will be determined at the time of commissioning.

However, there will be no change regarding land ownership.