After witnessing several rounds of delays, the government has finally agreed to the bids for the Tilaiya ultra mega power project, which would be held today at Jharkhand. It should be noted here that earlier the dates for the bids for the fourth ultra mega power project has been pushed back at least five times through 2008.

The government is most probably to receive a very encouraging response in the final bidding for this project in view of the tight liquidity position and high interest rates, informed the sources in the power industry. Aggressive bids had been received for the earlier set of ultra mega power projects- Sasan, Krishnapatnam and Mundra from a large number of power companies.

New benchmarks being set with the proposed tariffs below Rs 2 a unit for price bids for both Sasan, a pit-head power station and Mundra, a coastal project. However, analysts from the power sector are not hopeful this time around with cost escalations and high cost of debt.

“Price bids could be almost double of what you saw in the first set of ultra power projects. Debt, which comprises 70% of the financing is now much more expensive,” reported an official with one of the leading private power companies in the country.

Initially, the bids for Tilaiya were planned for March; however, that was postponed to June, before 4th November was decided as the last date for the RFP.

Since the regulatory clearances were unavailable, the project was delayed earlier.