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GERC edicts OEM & EPC particulars in project tender

Gujarat Electricity Regulatory Commission (GERC) on 26 February 2019 stating, all bidders taking part in auction for wind power projects should specify their equipment manufacturers and EPC (Engineering, Procurement, Construction) contractors they have tied up with.

 

GERC further stipulated that, at least 3 such manufacturers/contractors be mentioned such that the project is not held up if one of them is unable to fulfill commitments. This was also done so as to ensure the timely completion and preventing unnecessary pressure from the bidders over OEM (Original Equipment Manufacturer) for a dynamic and aggressive price. This is also expected to give more room for bargaining to the bidders.

When asked about the necessity of this clause without any instances of violations in the past, the responses were contradictory.

While an executive of an Independent Power Producer (IPP) said that it was done in the favor of Generators, an equipment manufacturer disagreed, saying that, the financing is tied up before the bidding takes place, hence reducing the IPPs ability to negotiate.

This order also states that 100%, instead of 75% of the PPA (Power Purchase Agreement) Tariff would be provided to developers if a project is to be commissioned more than 3 months prior to the original commissioning date.

 

As collated from Economic Times

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After a petition by Gujarat Urja Vikas Nigam Ltd. (GUVNL), the state's main discom, an order was passed by Gujarat Electricity Regulatory Commission (GERC) on 26 February 2019 stating, all bidders taking part in auction for wind power projects should specify their equipment manufacturers and EPC (Engineering, Procurement, Construction) contractors they have tied up with.

GERC further stipulated that, at least 3 such manufacturers/contractors be mentioned such that the project is not held up if one of them is unable to fulfill commitments. This was also done so as to ensure the timely completion and preventing unnecessary pressure from the bidders over OEM (Original Equipment Manufacturer) for a dynamic and aggressive price. This is also expected to give more room for bargaining to the bidders.

When asked about the necessity of this clause without any instances of violations in the past, the responses were contradictory.

While an executive of an Independent Power Producer (IPP) said that it was done in the favor of Generators, an equipment manufacturer disagreed, saying that, the financing is tied up before the bidding takes place, hence reducing the IPPs ability to negotiate.

This order also states that 100%, instead of 75% of the PPA (Power Purchase Agreement) Tariff would be provided to developers if a project is to be commissioned more than 3 months prior to the original commissioning date.

 

As collated from Economic Times

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