Solar companies seek Centre's intervention in UP solar bid cancelation

Private solar power companies have sought the Centre’s intervention in securing solar contracts after the tenders were cancelled by Uttar Pradesh earlier this week.

Uttar Pradesh has become the latest state to cancel winning bids for 184-Mw discovered through auctions in February last year. The solar companies said bid cancellation and re-negotiation attempts by states affects India’s image among foreign investors.

Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) issued letters informing cancellation to NV Vogt Singapore Private Ltd, Al-Jomaih-Jakson Power Private Ltd, Vijay Printing Press Private Ltd, and Talettutayi Solar Projects Eight saying their bids have become “time-barred and infructuous” since no action was taken by the firms after they consented for extension of the bid period validity till March 31, 2021.

“It is very wrong on the part of UPNEDA to conclude that no action has been taken by our members for the Bid Period extension. There is no basis for UPNEDA’s statement that says our bids became time barred and infructuous because we didn’t take any action, while all the way it was UPNEDA whose inaction led to this,” the National Solar Energy Federation of India (NSEFI) has said in its letter to Union power and renewable energy minister R K Singh.

It is logical that after a reverse auction process is completed the onus is on the bidding agency to issue the LOIs to the winners in a time bound manner as mentioned in the bidding guidelines. According to the RFP, UPNEDA was under an obligation to issue the Letter of Intent on or before 15 May 2020. “However, UPNEDA could not issue the LOI to our members within these timelines despite their regular follow up and requested our members to extend the timelines for extension of Bid Period Validity on various occasions which was duly accepted by our members. This was done by our members in the interest of commissioning the project hoping that they will receive the LOIs soon,” NSEFI said.

It said there has been an increasing trend among the states towards cancellation or re-negotiation of the bids, making it difficult for companies to execute projects in India.

“This uncertainty will not only hinder the FDI in the sector, but also make foreign investors cautious towards all investments into the Power Sector which will affect India’s renewable energy journey and targets,” it said.