L&T thrown out of mega NTPC deal of Rs. 25000 crores

NTPC, India’s top power producer, will issue fresh tenders worth about Rs 25,000 crores to source supercritical boilers as L&T Power one of the only  two bidders, disqualified on technical parameters.L&T Power has been found ineligible to supply both turbine generators and boilers. However, NTPC may not issue fresh tenders for turbine generators, a director on the company’s board told after meeting on Monday. The decision to issue fresh tenders for boilers was taken at the board meeting.

“We might not retender turbine generator packages as the company has enough options available. A decision to this effect will be taken later,” the NTPC director said.NTPC chairman and managing director R S Sharma said he would not like to comment on matters concerning the company’s board.NTPC floated tenders worth Rs 45,000 crore in October last year to procure energy-efficient supercritical equipment for five projects including that of Damodar Valley Corporation. Of this Rs 25,000 crore was for boilers.Alstom-Bharat Forge, Toshiba-JSW, Power Machines Bharat Heavy Electricals (Bhel) and L&T Power bid for turbine generator packages.The director said NTPC did not have much choice as only Bhel and L&T Power evinced interest to supply supercritical boilers for 11 units of 660 mw each.“The overall intention to call bulk tenders was to ramp up indigenous manufacturing base. There would be no healthy competition, if one of the two bidders disqualifies,” he said.However, he said the time of calling fresh bids would be decided later.

The decision to call fresh bids for boilers will immediately benefit companies like Gammon India, which has a technical tie-up with Italy’s Ansaldo to manufacture boilers. Gammon India has a 69.41 per cent stake in Ansaldo Caldaie Boilers India, which supplies steam generation units. The company had earlier sought extension of the bid deadline.

“A re-bid may result in larger competition, which would be to the benefit of NTPC instead of two bidders who already have orders to supply supercritical boilers,” a Gammon India official said.

Bhel chairman and managing director B P Rao had told FC that the company was prepared to re-bid for the boilers.

NTPC floated tenders for the mega boilers package in October 2009. The norms stipulate that a technology transfer agreement between a domestic equipment maker and its foreign technology provider should cover complete transfer of know-how for the supercritical steam generator by the time the eighth 660 mw supercritical unit is supplied by the bidder.