Mandatory competitive bidding for power projects-I: No further exemption for thermal generation, power transmission

The Ministry of Power has, in consultation with the Central Electricity Regulatory Commission (CERC) and the Central Electricity Authority (CEA), taken a policy decision to mandate competitive tariff-base bidding for thermal power plants and transmission systems from January 5, 2011. 

• This decision is in line with the national Tariff Policy, which calls for auctioning out of power projects after January 2011, unless the regulators deem that the market is not ready for such a dispensation.
• The ministry's resolution, obviously, comes as a disappointment to NTPC, which had asked the power ministry to exempt Public Sector Undertakings from the competitive bidding regime, so as to shield them from a fight with the arguably more efficient private sector. Now NTPC will have to compete with all other players in the generation segment to bag any new projects, possibly affecting the fruition of its ambition to be a 75 GW company by 2015.