petition no 783 of 2012 - uperc · website . 6) the commission heard the above petition on 21-02-12...

of 31

Petition No 783 of 2012

BEFORE

THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

LUCKNOW

Date of Order : 18-03-2013

PRESENT:

1. Hon’ble Shri Shree Ram, Member

2. Hon’ble Smt. Meenakshi Singh, Member

IN THE MATTER OF:

Adoption of transmission charges under Section 63 of the

Electricity Act, 2003 with respect to intra-state transmission

system, to be established by Western U.P. Power

Transmission Company Limited.

AND

IN THE MATTER OF

Petitioner Western U.P. Power Transmission Company Limited S-3, 2nd Floor, Aditya Mega Mall, Indirapuram, Ghaziabad.

Respondents 1. Managing Director, UPPTCL, Lucknow

2. Managing Director, PVVNL, Meerut

3. Managing Director, DVVNL, Agra

4. Managing Director, PuVVNL, Varanasi

5. Managing Director, MVVNL, Lucknow

of 31

The following were present:

1. Sri P.K. Sharma, Chief Engineer, UPPTCL

2. Sri D.C. Chaudhry, Superintendent Engineer, UPPTCL

3. Sri A. N. Gupta, Executive Engineer, UPPTCL

4. Sri Alok Kumar Gupta, WUPPTCL

5. Sri Manoj Tripathi, WUPPTCL

6. Sri Anand K. Ganesan, Advocate, WUPPTCL

Order

(Date of Hearing 20.11.2012)

1) The Petitioner, M/s Western UP Power Transmission Company Limited

( hereinafter referred to as WUPPTCL) has filed this petition on 06-01-12 under

section 63 of Electricity Act,2003 (the Act) and in accordance with Para 12.4 of

‘Tariff Based Competitive Bidding Guidelines for Transmission Service’, issued

by Ministry of Power, Govt. of India (hereinafter referred to as “GOI”), for

adoption of transmission charges with respect to the development of following

intra-state transmission system titled “765KV S/C Mainpuri - Hapur & Mainpuri -

Greater Noida lines with 765KV/400KV AIS at Hapur & Greater Noida and

associated Schemes/Works” on ‘Build, Own, Operate & Maintain and Transfer’

(hereinafter referred to as “BOOT”) basis.

Elements of Transmission System titled “765KV S/C Mainpuri - Hapur &

Mainpuri - Greater Noida lines with 765KV/400KV AIS at Hapur & Greater

Noida and associated Schemes/Works”

S.No. Name of the Transmission Element / Project

(I) Transmission lines

1 765kV S/C Mainpuri - Hapur with Quad Bersimis Conductor(250kms)

2 LILO of 400 kV S/C Moradabad - Muradnagar line at 765kV Hapur

Substation with Twin Moose Conductor(20kms)

3 400kV D/C Hapur– Ataur (Ghaziabad) Line with Quad Moose

of 31

Conductor (65Kms)

4 765kV S/C Greater Noida - Hapur Line with Quad Bersimis

Conductor(50kms)

5 LILO of 765kV Meerut(PGCIL) – Agra(PGCIL) Line at 765kV Greater

Noida Substation with Quad Bersimis Conductor (2xS/C) (40kms)

6 765kV S/C Mainpuri – Greater Noida Line with Quad Bersimis

Conductor (270kms)

7 LILO of 400kV S/C Muradnagar – Muzaffarnagar Line at Ataur

(Gaziabad) Substation with Twin Moose Conductor(40kms)

8 400kV D/C Greater Noida – Sikandrabad Line with Quad Moose

Conductor(40kms)

9 LILO of 400kV S/C Rishikesh – Kashipur Line at 400kV Substation

Nehtaur with Twin Moose Conductor (10kms)

10 400kV D/C (Quad) Ataur (Ghaziabad) – Indirapuram Line with Quad

Moose Conductor(25Kms)

11 400kV D/C Hapur (765kV) - Dasna Line with Quad Moose

Conductor(23kms)

12 400kV D/C (Quad) Greater Noida (765KV) – Noida (Sector-148) with

Quad Moose Conductor (30Kms)

(II) Substations

1 2X1500MVA,765/400kV & 2X500MVA, 400/220kV AIS at Hapur

2 2X1500MVA,765/400kV & 2X315MVA , 400/220kV AIS at Greater

Noida

3 2X500MVA, 400/220kV & 3X60MVA, 220/33kV GIS at Ataur

(Ghaziabad)

4 2X500MVA , 400/220kV AIS at Sikandrabad

5 2X200MVA, 400/132kV AIS at Nehtaur (Bijnore)

6 2X315MVA, 400/220kV & 2X100MVA , 220/132kV GIS at Dasna

7 2X500MVA , 400/220kV & 3X60MVA , 220/33kV GIS at Indirapuram

(III) Bus Switching-Arrangement

1 Hapur: One & half breaker with double main bus scheme for 765 &

of 31

400KV side and Double Main & Transfer Scheme for 220KV side.

2 Greater Noida: One & half breaker with double main bus scheme for

765 & 400KV side and Double Main & Transfer Scheme for 220KV

side.

3 Ataur: Double Main bus scheme for 400KV, 220KV & 33KV side.

4 Sikandrabad: One & half breaker with double main bus scheme

for400KV side and Double Main & Transfer Scheme for 220KV side.

5 Nehtaur: One & half breaker with double main bus scheme for400KV

& single main & transfer scheme for 132KV side.

6 Dasana: Double Main bus scheme for 400KV, 220KV & 132KV side.

7 Indirapuram: Double Main bus scheme for 400KV, 220KV & 33KV

side.

2) The Petitioner has also enclosed the copies of following documents with the

petition:-

(a) Letter of Intent (LOI) dated 31-05-11, issued by UPPTCL to the Cobra

Instalactiones Y Servicios S.A. & Megha Engineering and Infrastructure Ltd

Consortium (hereinafter referred to as “Cobra-MEIL Consortium” or

“Successful Bidder”) to establish the transmission system for “765KV S/C

Mainpuri- Hapur & Mainpuri – Greater Noida lines with 765KV/400KV AIS at

Hapur & Greater Noida and associated Schemes/Works” (hereinafter

referred to as “Project” or “Transmission System” or “Package-2”), specified

under tender specification no ESD-765/4(Package-2) and all its amendments

thereof till the bid deadline.

(b) The Transmission Service Agreement (TSA) signed on 27-12-11 by

WUPPTCL and the Long Term Transmission Customers (hereinafter referred

to as the “LTTCs”) of the Transmission System, namely – Paschimanchal

Vidyut Vitran Nigam Ltd(PVVNL), Dakshinanchal Vidyut Vitran Nigam Ltd

(DVVNL), Purvanchal Vidyut Vitran Nigam Ltd (PuVVNL) and Madhyanchal

Vidyut Vitran Nigam Ltd (MVVNL).

of 31

(c) Certification of Incorporation, Memorandum of Association & Article of

Association of WUPPTCL.

3) The Petitioner has also submitted that:-

a) The Energy Task Force (herein after referred to as “ETF”) constituted by the

Government of Uttar Pradesh (herein after referred to as “GoUP”) has

authorized U.P. Power Transmission Corporation Ltd (hereinafter referred to

as “UPPTCL”) to act as the Bid Process Coordinator (hereinafter referred to

as “BPC”) to carry out the tariff based competitive bidding process for the

selection of the Transmission Service Provider (hereinafter referred to as

“TSP”) to establish the Transmission System on BOOT basis under ‘Tariff

based Competitive Bidding Guidelines for Transmission Service’ and

‘Guidelines for Encouraging Competition in Development of Transmission

Projects’ (hereinafter referred to as the “Guidelines”), issued by GOI in

section 63 of the Act.

b) The BPC prepared the Request for Qualification (hereinafter referred to as

“RFQ”), Request for Proposal (hereinafter referred to as “RFP”) and

Transmission Service Agreement (hereinafter referred to as “TSA”)

documents based on the Standard Bid Documents of GOI with certain

deviations and these deviations were approved by the Commission. The

BPC also prepared Share Purchase Agreement (hereinafter referred to as

“SPA”) and Connection Agreement (hereinafter referred to as “CA”)

documents which were approved by the Commission.

c) Western UP Power Transmission Company Ltd. (hereinafter referred to as

the “WUPPTCL or “Petitioner”) was incorporated on 11th September, 2009

under the Companies Act, 1956 by the BPC/UPPTCL as its wholly owned

subsidiary to act as Special Purpose Vehicle (SPV) to initiate the activities of

the Project and to subsequently act as TSP after being acquired by the

Successful Bidder.

of 31

d) The BPC initiated the bidding process with the publication of Bid Invitation for

Qualification, in response to which and after evaluation, BPC shortlisted two

bidders namely Isolux Corsan Concesiones SA and Cobra Instalactiones y

Servicios SA as qualified bidders as per the specified criteria.

e) After shortlisting at RFQ stage, one of the qualified bidders, Cobra

Instalactiones y Servicios SA applied on 10-08-10 for the change of

composition from ‘Bidder’ to ‘Bidding Consortium’ in association with Megha

Engineering & Infrastructure Ltd as per the provisions of RFQ & RFP. The

BPC approved this change in composition vide letter dated 25-09-10.

f) Both the qualified bidders submitted their bids comprising of both non-

financial and financial parts on 20-11-10. BPC opened the non-financial bid

on the same day in presence of the representatives of both the bidders. After

completion of responsiveness check of the non-financial bids of both the

bidders, the BPC opened the financial bids on 25-03-11 in which Cobra-

MEIL Consortium has emerged out as the lowest quoted bidder with the

quote levelized transmission charge of Rs 8905.37 million per annum.

g) The BPC held the negotiations with the lowest quoted bidder, Cobra-MEIL

Consortium on 30-03-11 and the Consortium gave a discount of approx

1.74% to arrive at a levelized transmission charge of Rs 8750 million per

annum vide their letter dated 30-03-11.

4) Subsequent to the process of two-stage tariff based competitive bidding

conducted by BPC, Cobra Instalactiones Y Servicios S.A. & Megha Engineering

and Infrastructure Ltd Consortium has been evaluated as Successful Bidder and

in this regard a Letter of Intent (LOI) has been issued by the BPC on 31-05-11.

Thereafter the Successful Bidder acquired WUPPTCL (the project specific SPV)

and signed a Share Purchase Agreement on 22-09-11. The Transmission

Service Agreement has also been signed on 27-12-11 between the Petitioner

and the LTTCs of the Transmission System.

of 31

5) After issuance of LOI dated 31.05.2011by UPPTCL, CMD UPPTCL intimated

the Commission vide letter dated 21.07.2011 the bidding documents (RFQ &

RFP) were made as per the Standard Bid Documents of Ministry of Power, GOI,

after incorporating the provisions contained in the Commission’s orders and

certified that the bid process & bid evaluation has been carried out in conformity

with tariff based competitive bidding guidelines for transmission service of GOI

and tariff quoted by all the bidders have been made public and put on the official

website www.upptcl.org.

6) The Commission heard the above petition on 21-02-12 and directed UPPTCL

and WUPPTCL vide its order dated 19-03-12, to submit certain documents to

the Commission, including the Certification by the Bid Evaluation Committee

(hereinafter referred to as ”BEC”) required under Para 12.4 of the Guidelines,

within one month from the date of the order and decided to fix the next date of

hearing in the matter after filing of complete documents by both the parties.

7) The Commission again directed UPPTCL and WUPPTCL vide its order dated

21-05-12 to submit the remaining documents within two weeks from the date of

the order as some documents were not submitted by the parties. A meeting with

UPPTCL had also been convened by Secretary UPERC on the directions of the

Commission to discuss the pending issues in this petition and the minutes of

meeting dated 26-06-12 had been issued.

8) UPPTCL submitted the copies of the following documents to the Commission

vide its letters dated 10-04-12, 07-06-12 and 24-07-12:-

a) UP Govt. OM no 491 dated 07-09-09 authorizing the Energy Task Force

of GoUP to act as Empowered Committee.

b) UP Govt. OM no 492 dated 07-09-09 for nomination of UPPTCL to act as

the Bid Process Coordinator (BPC) to process the bids for selection of

developer to establish the Transmission System under PPP.

c) UP Govt. OM no 493 dated 07-09-09 for formation of Bid Evaluation

Committee (BEC), comprising of Industrial Development Commissioner

of 31

(as Chairman of BEC), Principal Secretary (Law), Principal Secretary

(Finance), Principal Secretary (Planning), Secretary (Energy), Chairman

UPPTCL, MD UPPTCL (as Convener of BEC), Member Central Electricity

Authority, Director (Finance) UPPTCL and Executive Director

(Transmission) UPPTCL.

d) OM No 557 dated 30-10-09 of Chairman UPPTCL for formation of bid

opening committee comprising of Executive Director (Transmission),

Chief General Manager (Finance), Chief Engineer (765kv),

Superintending Engineer (765kv) to open RFQ & RFP bids.

e) Intimation to the Commission by the Executive Director UPPTCL for

initiation of bidding process through letter dated 02-09-09.

f) Publication of the combined RFQ & RFP notice in ‘The Economic times’

(New Delhi, Mumbai and Bangalore), Times of India (New Delhi,

Mumbai), Hindustan times (New Delhi), Business Standard (New Delhi

and Mumbai) and Financial Express (New Delhi and Mumbai) through

letter dated 10-08-09 of UPPTCL.

g) Intimation of the combined RFQ & RFP notice to the Embassy of

Australia, Canada, China, France, Germany, Italy, Japan, New Zealand,

Russian Federation, Spain, South Africa, Switzerland, UAE, UK & USA

through letter dated 12-08-09 of UPPTCL.

h) Letter dated 29-06-11 of CMD UPPTCL to MDs of the distribution

companies (MVVNL, PVVNL, DVVNL & PuVVNL) for nomination to sign

TSA on behalf of LTTCs.

i) Authorization of the distribution companies to sign TSA.

j) Assessment of the responses to RFQ dated 18-11-09, draft assessment

report dated 18-02-10 and assessment report of March 2011 for financial

proposal of RFP.

k) Minutes of meeting of Bid Evaluation Committee (BEC) held on 23-02-10

and 30-03-11.

l) Minutes of Meeting of Energy Task Force (ETF) held on 24-02-10,

13-07-10, 26-11-10, 28-02-11 and 30-03-11 under the Chairmanship of

Chief Secretary, GoUP.

of 31

m) Letter no 452 dated 26-05-11 of Secretary, GoUP to CMD UPPTCL

conveying the decision of the Govt. to award the transmission works

under Package-2 to Cobra-MEIL Consortium at levelized tariff of

Rs 875Cr.

n) Consortium Agreement dated 28-07-10 and its deed of amendment dated

14-09-10.

o) Certificate dated 18-07-12 issued by WUPPTCL, Hyderabad, regarding

its share holding pattern.

p) Certificate dated 18-07-12 issued by Gomti Power Infrastructure Private

Limited, Hyderabad, regarding its share holding pattern.

q) Certificate dated 14-07-12 issued by Megha Engineering & Infrastructure

Limited, Hyderabad, regarding its share holding pattern.

r) Certificate dated 18-07-12 issued by WUPPTCL, Hyderabad, regarding

its composition of Board of Directors.

s) Certificate dated 23-08-12 issued by Gomti Power Infrastructure Private

Limited, Hyderabad, regarding its composition of Board of Directors.

t) Certificate dated 23-08-12 issued by Megha Engineering & Infrastructure

Limited, Hyderabad, regarding its composition of Board of Directors.

9) The brief contents of the following documents submitted by UPPTCL is as

hereunder:-

a) Assessment of the responses to RFQ dated 18-11-09 and draft assessment

report dated 18-02-10

The consultant M/s Crisil apprised BEC about the key findings and

deficiencies of the responses to RFQ of the four bidders namely L&T

Transco Pvt. Ltd., Isolux Corsan Concesiones SA, Cobra Instalactiones y

Servicios SA & Sterlite vide its report dated 18-11-09; and thereafter on

instructions of BEC, the BPC sought certain clarifications/additional

information from them. Based on such clarifications/additional information

received up to 23-01-10, the consultant evaluated the responses to RFQ

and submitted its report dated 18-02-10 to BEC.

of 31

According to this report, L&T Transco, in its original response to RFQ,

did not submit the documents to meet the technical requirement of at least

one project of Rs 200Cr in transmission sector as specified in RFQ,

however subsequent to clarifications/additional information sought by BPC

from time to time and received upto 23-01-10, the bidder submitted another

project in transmission sector which met the technical requirement of RFQ.

Similarly another bidder, Cobra Instalactiones Y Servicios SA in its

original response to RFQ had submitted its own financials to meet the

financial requirements of Internal Resource Generation (IRG) and Networth

specified in RFQ but it could not meet the Networth requirement of

Rs 1500Cr as specified in RFQ document. Subsequently Cobra in its

clarifications had submitted the financials of its parent company ACS

Servicos for meeting the financial requirements specified in RFQ.

The BPC sought the legal opinion on the subsequent submission of

documents by L&T Transco and Cobra Instalactiones Y Servicios, SA from

Additional Advocate General, Government of U.P. In view of legal opinion

obtained from Additional Advocate General Bid document of Cobra was

considered and found proper by the B.P.C.

b) Minutes of meeting of Bid Evaluation Committee held on 23-02-10

The meeting was held under the Chairmanship of Industrial Development

Commissioner Government of U.P. for finalization of transmission projects

under PPP in specification no ESD/765/4. Vide above minutes, BEC agreed

to the consultant’s report dated 18-02-10 and recommended ETF for

approving Isolux and Cobra as the qualified bidders for the RFP stage while

disqualifying L&T Transco and Sterlite at RFQ stage itself in accordance

with the legal view obtained from Additional Advocate General of UP

c) Minutes of meeting of Energy Task Force held on 24-02-10

The above minutes refers that ETF agreed with the recommendations of Bid

Evaluation Committee and accorded its consent to issue RFP to Isolux

Corsan Concesiones S.A. and Cobra Instalactiones Servicios S.A.

of 31

d) Minutes of meeting of Energy Task Force held on 28-02-10

ETF approved minimum benchmark price for Package-2 as Rs 840.40Cr.

ETF also decided that if the price bid lies within 10% above the minimum

benchmark price then BEC to negotiate with the L1 bidder otherwise if the

price bid lies beyond 10% above the minimum benchmark price then Swiss

Challenge Method to be adopted.

e) Minutes of meeting of Energy Task Force held on 13-07-10

ETF accorded its post-facto approval for formation of the shell companies

namely South East UP Power Transmission Company Limited and Western

UP Power Transmission Company Limited for PPP transmission Package-

1&2.

f) Minutes of meeting of Energy Task Force held on 26-11-10

Vide above minutes ETF had given its consent for not adding the price of

the land of the substations in the acquisition price of the SPV and the same

to be paid separately by the developer. ETF also accorded its post-facto

approval for the amendments of the scope of work on the advice of Central

Electricity Authority (CEA) and formation of Cobra-MEIL Consortium in

accordance with clause 2.2.6.4 of RFQ.

g) Assessment Report of March 2011for financial proposal of RFP

The above report of the consultant states that the levelized transmission

tariff quoted by Cobra-MEIL Consortium was Rs 8905.37 million which was

the lowest and therefore Cobra-MEIL Consortium has been considered as

the L1 bidder followed by Isolux as L2 bidder. However, the quote of the L1

bidder was within10% of the benchmark tariff approved by ETF therefore

Swiss Challenge Method not to be implemented and negotiation to be done

with L1 bidder.

of 31

h) Minutes of meeting of Bid Evaluation Committee held on 30-03-11

The meeting was held under the Chairmanship of Industrial Development

Commissioner Government of U.P. and Principal Secretary (Finance),

GoUP regarding PPP transmission projects (Package-2) in specification no

ESD/765/4. BEC recommended to award Package-2 to Cobra-MEIL

Consortium at the levelized tariff of Rs 875Cr per annum and placed its

recommendations before ETF for further decision in the matter. The minutes

also says that the consultant had presented RFP bid evaluation report

before BEC, according to which the quoted levelized tariff of Cobra for

Package-2 was Rs 890.537Cr which was the lowest and therefore Cobra

was the lowest bidder in Package-2 followed by Isolux. The report further

points out that L1 levelized tariff was within 10% of the benchmark levelized

tariff so in view of decision taken by ETF, there was no need to invoke

Swiss Challenge Method, and BEC may negotiate with L1-bidder. The BEC

negotiated with L1 bidder which agreed to reduce the levelized tariff to Rs

875Cr per annum which was still 4.12% higher than the benchmark

levelized tariff approved by ETF. The minutes further says that in view of

inflation, higher interest rates and the uncertainty about the cost of right of

way etc, the Bid Evaluation Committee accepted the price above 4.12%

over the benchmark price and placed its recommendations before ETF.

i) Minutes of meeting of Energy Task Force held on 30-03-11

ETF while agreeing with the recommendations of BEC, accorded its consent

to award Package-2 to Cobra-MEIL Consortium at levelized tariff of Rs

875Cr and directed to accord the approval of the Cabinet also before

executing any agreement with the bidder.

10) WUPPTCL submitted the copies of the following documents to the Commission

vide its letters dated 06-04-12 and 29-05-12:-

a) Certification of Incorporation, Memorandum of Association, Article of

Association and Certificate of Commencement of Business of WUPPTCL.

b) Extract of minutes dated 03-10-11 of Board of Directors of WUPPTCL.

of 31

c) Extract of minutes dated 24-12-11 of Board of Directors of WUPPTCL for

authorization to sign Transmission Service Agreement.

d) Extract of minutes dated 03-09-11 of Board of Directors of Megha

Engineering & Infrastructure Ltd (MEIL) for authorization to sign Share

Purchase Agreement.

e) Extract of minutes dated 03-09-11 of Board of Directors of Gomti Power

Infrastructure Private Limited for authorization to sign Share Purchase

Agreement.

f) Letter dated 27-03-12 of WUPPTCL to Ministry of Corporate Affairs,

Registrar of Companies, Kanpur.

g) Electronic copies of Form-32 filed by WUPPTCL in Registrar of

Companies.

11) Conformity certificate dated July, 2011 has been submitted to the Commission

issued by Shri Navneet Sehgal, CMD, UPPTCL stating that the Bid evaluation

and bid processing has been done in conformity with tariff based competitive

bidding guidelines for transmission service. Subsequent to the submission of a

conformity certificate of Sri Navneet Sehgal, CMD UPPTCL in July’11, another

conformity certificate dated 09-08-12 of Sri Sanjay Prasad, Secretary, GoUP,

has been submitted to the Commission in this regard. Since these certificates

were not in accordance with the guidelines of Government of India, the

Commission directed UPPTCL, vide letter dated 05-09-12, that instead of above

certificate from CMD, UPPTCL and Sri Sanjay Prasad, Secretary Energy,

Government of U.P., the certification of Bid Evaluation Committee is required to

process the case; therefore the same may be submitted at the earliest.

12) The Commission observed that in spite of its clear directions to UPPTCL vide

orders dated 19-03-12 & 21-05-12 and subsequent letters dated 08-08-12 &

05-09-12; the certification by the Bid Evaluation Committee was not submitted.

The Commission also observed that apart from the non-submission of the

Certification by BEC, there are some more issues which need to be addressed.

In light of these facts, the Commission decided to review all the pending issues

of 31

through a hearing and accordingly issued a notice dated 01-11-12 to all the

concerned parties (WUPPTCL, UPPTCL, PVVNL, DVVNL, PuVVNL and

MVVNL) for hearing in the matter on 20-11-12.

13) Sri Avdhesh Kumar Verma, Chairman, Rajya Vidyut Upbhokta Parishad and the

member of State Advisory Committee submitted a representation on 19-11-12

and sought the Commission’s permission to attend the hearing on 20-11-12.

Sri Verma also raised the following points:-

“………………..

1- tSlk fd vki voxr gh gksaxs fd izns”k dk ÅtkZ foHkkx@;w0ih0 ikoj VªkUleh”ku dEiuh }kjk Vs.Mj fMlkbM gks tkus ds ckn Vh,l,@vkj0,Q0D;w0 ds izkfo/kkuksa ds foijhr tkdj ,lh,lvkj ewt@cj”keht ¼ACSR Mose & Bersimis) d.MDVj dh txg fVªiy ,lh ¼AAAC½ d.MDVj yxkus ds fy;s cnyko gsrq ,d desVh dk xBu fd;k x;k gS tks Hkkjr ljdkj }kjk cuk;h x;h fofMax xkbM ykbu dh /kkjk 9-6-4 o dsUnzh; lrZdrk vk;ksx ds izkfo/kkuksa ds foijhr gS ,sls esa VSfjQ ,Mki”ku dh dk;Zokgh ij fopkj djuk fcfMax xkbM ykbu ds f[kykQ gSA

2- Hkkjr ljdkj }kjk cuk;h x;h VSfjQ csl dEiVsfVc fcfMax xkbM ykbu dh /kkjk 12-4 ftlesa

;g izkfo/kkfur gS fd ^^12.4 The final TSA along with the certification by the bid

Evaluation Committee shall be forwarded to the appropriate Commission for adoption of

tariffs in terms of Section 63 of the Act.” bl izdkj ;g iwjh rjg ls fl) gksrk gS fd tc rd vk;ksx }kjk Bid Evaluation Committee ls izkIr lkVhZfQdsV dk v/;;u xEHkhjrk ls ugha gks tkrk ;g fl) gksuk fd fcfMax izfdz;k iwjh rjg ls ikjn”khZ Fkh vFkok ugha laHko ugha gS ij fo”ks’k /;ku nsuk gksxkA

3- fo|qr vf/kfu;e 2003 dh /kkjk 63 ftlds rgr /kkjk 62 ds vUrfoZ’V vk;ksx dks fo|qr nj dks

vaxhdkj djuk gS ijUrq ;g ns[kk tkuk vfuok;Z gS fd dsUnzh; ljdkj }kjk cuk;h x;h fcfMax xkbM ykbu dk ikyu gqvk gS vFkok ugha rHkh ikjn”khZ izfdz;k dk [kqyklk gksxk ,sls esa orZeku esa py jgh iwjh izfdz;k Lor% ;g crkrh gS fd izfdz;k ikjn”khZ ugha gS ,sls esa vk;ksx dks mijksDr fcUnqvksa ij /;ku nsuk vko”;d gSA

………………..”

Shri Verma also submitted another representation on 07-02-2013 on the

similar issues.

Similarly an intervener application on behalf of Sri Rama Shankar Awasthi has

been filed on 20-11-12. The following points have been raised by Sri Awasthi in

his application:

of 31

“……………….

a. as per transmission service agreement M/S Cobra Instalaciones y.servicious

S.A., is the lead member of Cobra- MEIL consortium. The commission

should examine whether M/s cobra is still a lead member or not.

b. That as per clause no 9.6.4. of tariff based competitive bidding guidelines for

transmission services approved by Ministry Of Power, GOI, TSA proposed to

be entered with the selected bidder. The TSA proposed in the RFP stage

may be amended based on the inputs received from bidders during the pre

bid conference and it will be made available to all RFP bidders. No further

amendments shall be carried out in the TSA.

As per my knowledge based upon daily news paper that above company are

pursu to State govt and UPPTCL FOR change of ACSR Moose, berisim

conductor to AAC Conductor. So it is a clear cut violation of TSA guidelines.

c. That as per clause no 12.4. of tariff based competitive bidding guidelines for

transmission services approved by Ministry of Power, GOI, The final TSA

along with the certification by the Bid Evaluation Committee shall be

forwarded to the Appropriate Commission for adoption of tariffs in terms of

Section 63 of the Act.

As per my knowledge Bid Evaluation Committee are not forwarded Certificate

to commission.

d. That as per consortium approved at present cobra have 84% stake holding

and Megha have 16% stake holding and lead member not have stake

holding below than 51% upto validity of TSA. Please commission examine

that this stake holding is continue or change and if it is change then new

stake holding.

of 31

e. That the issues involved in the aforesaid proceedings is to public importance.

The State exchequer has to suffer huge loss due to the non compliance of

the mandatory provisions of law.

f. That in view of the aforesaid facts and circumstances, it is expedient in the

interest of justice that this Hon’ble Commission may graciously be pleased to

allow the aforesaid application and permit the applicant to have say in the

aforesaid matter and further the applicant may be permitted to file detailed

and comprehensive objection in the aforesaid matter.

……………..”

The Commission observed that the above issues raised by Sri Avadhesh Kumar

Verma and Sri Rama Shankar Awasthi are mainly concerned with the use of

conductor in the project and submission of certification by Bid Evaluation

Committee required under tariff based competitive bidding guidelines of GOI.

The issue of use of the conductor in the project under this petition has already

been decided by the Commission vide its order dated 19.03.2012 in petition no.

782/2012 of WUPPTCL, in which the Commission refused to allow an option for

use of Bersimis Equivalent & Moose Equivalent AAAC Conductor in addition to

ACSR Bersimis and ACSR Moose conductor in the Project. In light of

Commission’s order dated 19.03.2012, the issue of conductor, raised by Sri

Verma and Sri Awasthi, does not apply to this petition.

The Commission also directs UPPTCL & WUPPTCL to file their point-

wise replies on the above issues, raised by Sri Verma and Sri Awasthi, with a

copy to them also, within two weeks from the date of this order.

However, the issue of certification by Bid Evaluation Committee is being

taken up by the Commission in the following paras of this order.

14) During the hearing, the Commission observed that none from the four

distribution companies – PVVNL, DVVNL, MVVNL and PuVVNL participated.

The Commission expressed its concern on their absence especially in the light

of the fact that the Transmission System, under the present context, is being

developed for the distribution companies only, who are its Long Term

of 31

Transmission Customers (LTTCs). It is the distribution companies who jointly

signed the Transmission Service Agreement (TSA) with WUPPTCL and from

whom the costs would be recovered during the entire term of 35 years of TSA.

15) The Commission also expressed its displeasure as the Director UPPTCL did not

participate in the hearing. The Commission inquired from the present members

of UPPTCL whether they are conversant with the issues of the petition and after

obtaining an affirmative reply from them, the Commission initiated the

proceedings.

16) As few issues of similar nature were already discussed during the previous

hearing on the same day in another petition 797/2012, in presence of the same

officers of UPPTCL and the common advocate Sri Ganesan, therefore the

Commission did not discuss them in detail during the hearing in this petition. All

contents and directions on such issues are being reiterated and shall be

applicable to this petition as well.

17) During the hearing the Commission took up the following issues.

a) Certification by Bid Evaluation Committee

The Commission reiterated its earlier stand for submission of Certification

by Bid Evaluation Committee by quoting the provisions of section-63 of the

Act and para-12.4 of the Guidelines. The tariff adoption U/s 63 of the Act

refers to the bidding process in accordance with the guidelines issued by

the Central Government and Para-12.4 of ‘Tariff based Competitive-bidding

Guidelines for Transmission Service’ of GOI requires final TSA along with

the Certification by the Bid Evaluation Committee to be forwarded to the

Commission for adoption of tariffs. In light of above and its earlier orders

dated 19-03-12 & 21-05-12, the Commission inquired why the required

Certification of BEC has not been submitted so far by UPPTCL.

of 31

Sri Chaudhry of UPPTCL replied that two certificates, in this regard, have

been submitted to the Commission; one issued by CMD UPPTCL in July’11

and another issued by Secretary (Energy) GoUP in Aug’12. He further

added that the State Government had formed the Bid Evaluation

Committee. They convened all the meetings and conveyed all its decisions

to UPPTCL. We played no role in all these process. He further submitted

that Secretary (Energy) in his certificate dated 09-08-12 has certified that

the bid process & bid evaluation took place as per the Guidelines issued by

Ministry of Power, GOI. At present the Bid Evaluation Committee is not in

existence after the evaluation of bids. We have submitted all the relevant

documents e.g. - BEC minutes, ETF minutes etc. to the Commission,

therefore the certificate issued by Secretary (Energy) may kindly be

accepted to proceed with the adoption of the Tariff.

In reference to letter dated 9.8.2012 from Shri Sanjay Prasad, Secretary,

Govt. of U.P. with a copy to M.D., UPPTCL regarding conformity certificate

Commission informed M.D., UPPTCL vide its letter dated 5.9.2012 that the

certification of Bid Evaluation Committee instead of letter dated 9.8.2012 of

Secretary, Govt. of U.P. is essential.

The Commission inquired categorically why UPPTCL, in its capacity of BPC,

could not obtain the certification from BEC. UPPTCL was unable to

substantiate with proper reasonability in this regard. On the instructions of

the Commission, Sri Gupta of UPPTCL read the provision of section 63 of

the Act, the relevant clause of the guidelines of GOI and the O.M. No 493

dated 07-09-09 of GoUP, issued by Secretary (Energy) for formation of Bid

Evaluation Committee, as hereunder:-

Section 63 of the Act for Determination of tariff by bidding process

“Notwithstanding anything contained in section 62, the Appropriate

Commission shall adopt the tariff if such tariff has been determined through

of 31

transparent process of bidding in accordance with the guidelines issued by

the Central Government.”

Para 12.4 of ‘Tariff based Competitive-bidding Guidelines for Transmission

Service’ of GOI

“The final TSA along with the certification by the Bid Evaluation

Committee shall be forwarded to the Appropriate Commission for adoption

of tariffs in terms of Section 63 of the Act.”

lfpo] mRrj izns”k “kklu] ÅtkZ ¼futh fuos”k½ izdks’B }kjk tkjh dk;kZy; Kki la[;k

493 fnukad 07&09&09

**X;kjgoha iapo’khZ; ;kstuk esa ikjs’k.k Lda/k dh ifj;kstukvksa dk fØ;kUo;u ih0ih0ih0 fof/k }kjk djkus gsrq fodkldrkZ ds p;u gsrq vkekaf=r fufonk izi=ksa ¼vkj0,Q0D;w0 o vkj0,Q0ih0½ ds vkWadyu lfefr dk xBu fuEuor fd;k tkrk gS%&

1- voLFkkiuk ,oa vkS|ksfxd fodkl vk;qDr] m0iz0 “kklu ¼v/;{k½ 2- izeq[k lfpo] U;k;] m0iz0 “kklu ¼lnL;½ 3- izeq[k lfpo] foRr] m0iz0 “kklu vFkok muds izfrfuf/k ¼lnL;½ 4- izeq[k lfpo] fu;kstu] m0iz0 “kklu ¼lnL; ½ 5- lfpo] ÅtkZ] m0iz0 “kklu ¼lnL; ½ 6- v/;{k] m0iz0 ikoj VªkWalfe”ku dkjiksjs”ku fy0 ¼lnL; ½ 7- izcU/k funs”kd] m0iz0 ikoj VªkWalfe”ku dkjiksjs”ku fy0 ¼lnL;@la;kstd½ 8- lnL;] dsUnzh; fo|qr izkf/kdj.k vFkok muds izfrfuf/k ¼lnL; ½ 9- funs”kd] foRr m0iz0 ikoj dkjiksjs”ku fy0 ¼lnL; ½ 10- vf/k”kklh funs”kd ¼ikjs’k.k½] m0iz0 ikoj VªkWalfe”ku dkjiksjs”ku fy0 ¼lnL;@lgla;kstd½

The Commission clarified UPPTCL that as per the bidding guidelines

of GOI, the Certification by Bid Evaluation Committee is essential to

proceed for adoption of Tariff. The Commission is of the view that although

it was the responsibility of the members of the Bid Evaluation Committee to

certify the transparency in the bid evaluation process (RFQ & RFP) but this

does not bar UPPTCL from its responsibility as the Bid Process Coordinator

which had to necessarily obtain the required certification from the Bid

Evaluation Committee. The Commission expressed its displeasure in the

manner UPPTCL played its role of Bid Process Coordinator who could not

of 31

obtain the certification of BEC especially in the light of the fact that the

requirement of said certification has been effective since Oct’08 whereas

the bidding process of Package-2 got completed three years thereafter. The

Commission considered it as a very serious lapse on the part of UPPTCL.

In view of above, the Commission directs UPPTCL to submit the

Certification by Bid Evaluation Committee, (which is mandatory

requirement) within two weeks from the date of this order. The Commission

also clarified that if the required certification is not submitted within the said

time period, UPPTCL shall be held responsible for any delay in adoption of

Tariff.

b) Clause 19.2.3 of TSA Clause 19.2.3 says that in case of any change in ownership of WUPPTCL,

the new owner/consortium must fulfill the technical requirement and

according to the directions of the Commission vide its order dated 15-09-10,

the technical criteria was to be decided mutually by UPPTCL and the

successful bidder during pre-award discussions. Accordingly the clause

19.2.3 of TSA has been finalized as hereunder:-

Clause 19.2.3 TSA

“ …………

In case of any change in ownership, the new owner/consortium must fulfill

the minimum technical requirement as specified below:

A) In case of change in ownership until COD+2 years, the new owner /

consortium shall have at least the same technical requirements than the

bidders were required to have at the RFQ stage to be qualified.

B) After COD+5 years the new owner / consortium shall demonstrate

capacity to operate Transmission Lines & substations achieving the

stipulated standards of performance either himself or through a contractor

who have atleast 10 years experience of maintaining 765kv substations

and 400kv lines. In case of persistent failure to deliver the stipulated

performance the LTTC will have a right to terminate the TSA after giving

one month notice.”

of 31

The Commission pointed out that there is a gap of three years between

COD+2 & COD+5. The Commission referred to the review petition 691/2010

filed by UPPTCL vide which UPPTCL added the provision of the technical

criteria to be fulfilled by the new owner / consortium in case of any change in

the ownership of WUPPTCL under clause 19.2.3 of TSA,.

The Commission further pointed out that the clause 19.2.1 of TSA says that

“the aggregate equity share holding of the selected bidder in the issued and

paid up equity share capital of WUPPTCL shall not be less than (a) 51%

upto a period of 2 years after COD of the Project; and (b) 26% for a period of

3 years thereafter”. In view of above clause of TSA, if the aggregate equity

share holding of the selected bidder in the issued and paid up equity share

capital of WUPPTCL shall not be less than 26% upto a period of 5 years

after COD of the project then the selected bidder shall be the part of

WUPPTCL upto the five years after COD of the Project. Therefore any exit of

the selected bidder from WUPPTCL will come up only after (COD+5) years

and hence the technical criteria to be fulfilled by the new owner / consortium

in case of any change in the ownership of WUPPTCL may arise only after

(COD+5) years. In light of above facts, the Commission asked UPPTCL to

clarify the issue.

Sri Chaudhry explained that in accordance with the provision of clause

19.2.1, the selected bidder has to retain 51% shares of the company till

(COD+2) years and 26% for a period of 3 years thereafter. Further clause

19.2.3 says that if there is a change in ownership before COD itself and till

(COD+2), all the technical & financial conditions, defined in the RFQ

document, have to be fulfilled by the new owner. If the ownership changes

after (COD+5) then the new owner may not have the same qualifications as

defined in RFQ. It can be interpreted like this: the different technical

requirements of the new owner are mentioned for (a) upto (COD+2) years

and (b) after (COD+5) years. It means the ownership cannot be changed

between (COD+2) and (COD+5) years.

of 31

WUPPTCL submitted that TSA has been signed and was approved by the

Commission and cannot be changed. If there is no dispute between the

concerned parties - UPPTCL & WUPPTCL over this clause, why this issue is

being taken up by the Commission. WUPPTCL requested that this issue

should be dealt in a separate proceeding with a notice to the parties.

The Commission clarified that it is an issue which was to be decided by

UPPTCL and the selected bidder during pre-award discussions. The issue

got finalized during pre-award and accordingly TSA has been amended and

signed by all the parties. The issue came up to the knowledge of the

Commission after the signing of TSA documents and then only the

Commission observed some inconsistency in the clause. WUPPTCL

reiterated its stand that when both the parties agree to it issue need not be

required to be raised again.

The Commission was not convinced with the arguments of WUPPTCL and

decided that it cannot leave any ambiguity in the documents. As this clause

was finalized by the BPC, therefore the Commission directs UPPTCL to file

its reply within two weeks from the date of this order.

c) Schedule-10 of TSA As per TSA document, the entire bid (both financial and non-financial bids) of

the Selected Bidder is required to be attached under Schedule-10 of TSA.

As the copy of TSA had been enclosed with the petition, the Commission

went through it and made the following observations attached with TSA

Schedule-10:-

I) Only the originally quoted transmission charges were attached by BPC

under TSA schedule-10, whereas the LOI dated 31-05-11 indicated that

some negotiation with the L1 bidder (Cobra-MEIL Consortium) also took

place during the bidding process and thereafter the consortium submitted

of 31

the revised transmission charges of 35 years corresponding to the

levelized tariff of Rs 875Cr/year. Since the revised transmission charges

quoted by the L1 Bidder on the basis of which LOI has been issued by

BPC and it has not been made the part of TSA schedule-10, therefore

there is an inconsistency between TSA schedule-10 and TSA schedule-6.

In view of such inconsistency, the Commission is of the opinion that the

revised transmission charges also should have been made the part of

TSA schedule-10 under financial bid.

UPPTCL replied that the revised transmission charges were quoted by

Cobra Instalactiones Y Servicios S.A, New Delhi vide its letter dated

31-05-11. UPPTCL vide its letter dated 28-05-11 in this regard asked

Cobra to re-submit the negotiated year-wise non escalable transmission

charges for 35 years based on 1.74% discount to match the negotiated

levelized tariff of Rs 8750 million/year. This has already been submitted

to the Commission vide letter dated 24-07-12. UPPTCL further added

that both the above documents have been made the additional

documents to TSA vide letter dated 04-09-12 and copy of this letter has

been sent to WUPPTCL and all the four discoms.

II) An unsigned letter dated 22-10-10 of Registrar of Companies (RoC) has

been made the part of TSA Schedule-10 under non-financial bid which

was allowing change of name from ‘Cobra Power Infrastructure Private

Limited’ to ‘Gomti Power Infrastructure Pvt. Limited’.

UPPTCL replied that necessary clarifications have already been

submitted to the Commission vide letter dated 24-07-12 according to

which Gomti Power Infrastructure Pvt. Limited, which is a subsidiary of

Cobra Instalactiones Y Servicios S.A and is the investor in WUPPTCL on

behalf of the consortium, was originally incorporated in the name of

Cobra Power Infrastructure Private Limited. Before submission of bid,

Cobra Power Infrastructure Private Limited applied in RoC on 13-10-10

for change of its name to Gomti Power Infrastructure Pvt. Limited. RoC

of 31

vide its electronic confirmation dated 22-10-10 intimated its no objection

and the same was submitted with the bid. However, formal revised

certification of incorporation dated 20-11-10 duly signed by RoC, was

submitted by the consortium subsequently vide their letter dated

02-12-10. UPPTCL further added that RoC certificate dated 20-11-10 and

UPPTCL letter dated 02-12-10 have been made the additional

documents to TSA vide letter dated 04-09-12 and copy of this letter has

been sent to WUPPTCL and all the four discoms

III) In view of UPPTCL’s reply under para-C(II) that the name of Cobra Power

Infrastructure Private Limited had been changed to Gomti Power

Infrastructure Pvt. Limited by Registrar of Companies vide its electronic

confirmation dated 22-10-10, the certificate dated 19-11-10 of Grover

Ahuja & Associates attached with TSA Schedule-10 (non-financial),

should have certified Cobra Instalactiones Y Servicios S.A and MEIL as

shareholders of Gomti Power Infrastructure Pvt. Limited instead of Cobra

Power Infrastructure Private Limited.

UPPTCL replied that necessary clarifications have already been

submitted to the Commission vide letter dated 07-09-12 according to

which Cobra Power Infrastructure Private Limited was initially the affiliate

company of Cobra Instalactiones Y Servicios & MEIL Consortium. Cobra

Instalactiones Y Servicios was having 98.86% shares of Cobra Power

Infrastructure Private Limited and MEIL having 1.14% shares. The similar

fact was mentioned in the certificate dated 19-11-10 of Grover Ahuja &

Associates, submitted by the Consortium with RFP non-financial bid.

Since the formal name change from Cobra Power Infrastructure Private

Limited to Gomti Power Infrastructure Pvt. Limited was allowed by

Registrar of Companies on 20-11-10, therefore as on 19-11-10, the

Register of Members & Share Transfer documents contained the name of

Cobra Power Infrastructure Private Limited only with its 98.86% share in

of 31

the name of Cobra Instalactiones Y Servicios S.A and 1.14% in the name

of MEIL.

In view of UPPTCL’s reply under para-C(III) & (IV), the Commission

asked UPPTCL to clarify the mismatch in certificates, attached with TSA

schedule-10, issued on the same date (19-11-10) by Grover Ahuja &

Associates and certificate of Equity-Investment by the Consortium, which

could not be replied satisfactorily by UPPTCL.

In view of above, the Commission directs UPPTCL to file its reply under

an affidavit within two weeks from the date of this order.

IV) The certificate of Deloitte, attached with TSA schedule-10, refers to the

board resolution of ACS Servicios regarding investment in SEUPPTCL.

The Commission asked UPPTCL how this document pertaining to

SEUPPTCL has been attached with TSA of Package-2

UPPTCL replied that it was an inadvertent error and intimated that

another certificate of Deloitte referring to the board resolution of ACS

Servicios regarding investment in WUPPTCL has been made the

additional document to TSA vide letter dated 04-09-12 and copy of this

letter has been sent to WUPPTCL and all the four discoms.

The Commission did not agree in the manner UPPTCL unilaterally made

certain documents as the additional documents to TSA vide letter dated

04-09-12 with its copy to WUPPTCL and all the four discoms and therefore

directs UPPTCL to make all such documents, other related correspondences

in this regard and clarifications if any as part of TSA Schedule-10 and get the

amended part of TSA signed by the authorized representatives of all the

concerned parties within two weeks from the date of this order, with a copy

to the Commission.

d) Signing of Share Purchase Agreement (SPA)

of 31

In accordance with the contents of approved SPA documents, “SPA” is an

agreement amongst UPPCL, WUPPTCL and the Successful Bidder for the

purchase of 100% shareholding of WUPPTCL, for the Acquisition Price, by

the Successful Bidder. Further, as per LOI dated 31-05-12 issued by

UPPTCL, the Successful Bidder in the Project was Cobra-MEIL Consortium.

Therefore, the Commission is of the view that SPA was required to be signed

only by the three parties - UPPCL, WUPPTCL and Cobra-MEIL Consortium,

whereas it has been observed that SPA was signed by the fourth party -

Gomti Power Infrastructure Pvt. Limited. The Commission also observed that

WUPPTCL in its letter dated 27-03-12 addressed to Registrar of Companies

stated that WUPPTCL was taken over by MEIL and Gomti Power

Infrastructure Pvt Limited (Cobra-MEIL Consortium).

In view of above, the Commission asked who acquired WUPPTCL and

inquired about the role of Gomti Power Infrastructure Pvt Limited to sign

SPA. Both UPPTCL and WUPPTCL were unable to reply satisfactorily.

The Commission considers it as a deviation from the approved SPA

document and directs UPPTCL & WUPPTCL to file their replies under an

affidavit within two weeks from the date of this order.

The Commission also observed that the same person of MEIL has

signed SPA on behalf of Cobra and MEIL both but the board resolution of

Cobra Instalactiones Y Servicios SA for authorization to sign SPA to the

person has not been submitted so far in spite of the directions of the

Commission’s orders dated 19-03-12 and 21-05-12.

In view of above, the Commission directs WUPPTCL to submit the board

resolution of Cobra Instalactiones Y Servicios SA for authorization to sign

SPA under an affidavit within two weeks from the date of this order.

e) Delay in bidding process

(I) As per the Guidelines of GOI, the total time to complete the bidding

process, starting from publication of RFQ to signing of agreements, is

of 31

only 240 days; whereas UPPTCL took more than 860 days to complete

the bidding process. The Commission inquired the reasons of this delay.

UPPTCL replied that it was due to the approval of various documents

and procedures required at different levels of decision making bodies.

(II) As per clause 2.4 of RFP documents, the SPA & TSA were required to

be signed within 15 days of issue of LOI. Since LOI was issued on 31-

05-11 and SPA & TSA were signed on 22-09-11 & 27-12-11

respectively, the Commission inquired about the delay in signing of SPA

(after a period of three months) and TSA (after a period of 6 months).

UPPTCL replied that it was due to the time taken by the Successful

Bidder (Cobra-MEIL Consortium)

(III) UPPTCL allowed submission of RFQ bids up to 12-11-09 and RFP bids

up to 20-11-10, which was not in accordance with the directions of the

Commission. The Commission vide its orders dated 15-10-09 &

20-10-09 directed UPPTCL to issue modified RFQ to the bidders within

seven days of the order and next seven days for filing the responses.

Similarly the Commission, vide its orders dated 02-07-10 directed

UPPTCL to issue modified RFP documents within seven days of the

order and next 30 days for submission of RFP bids. Since the modified

RFP & RFP Project Documents had already been issued to the bidders,

the Commission directed UPPTCL vide its order dated 15-09-10 in the

review petition 691/2010, filed by UPPTCL, to make the necessary

modifications in the documents according to the decisions and directions

of the Commission through an amendment within seven days of the

order and issue the amendment to both the bidders within three days

thereafter.

In view of above, the Commission inquired why the submission of RFQ

and RFP bids did not take place as per the orders of the Commission.

UPPTCL replied that submission of RFQ bids was extended on the

requests of the bidders to enable more participants to submit the bids

of 31

and submission of RFP bids was extended from time to time and finally

to 20-11-10 on the bidder’s request.

In light of the above replies of UPPTCL and to the fact that the selection

process to establish intra state transmission system through competitive

bidding route under the guidelines of GOI in section 63 of the Act has been

taken up for the first time in the state of Uttar Pradesh, the Commission

decides to consider the above deviations of its orders and the delays at

various stages of bidding and directs both the parties to file their replies

under an affidavit within two weeks from the date of this order. However, the

Commission passes its remarks that all the concerned entities involved

directly or indirectly in the bidding process, should have taken it in a more

serious manner.

f) General Clarifications

(I) The Commission sought clarifications from UPPTCL about the

negotiation with the L1 bidder and placement of LOI on negotiated price,

when there was no such provision in the RFP bid document. UPPTCL

could not reply satisfactorily. The Commission directed UPPTCL to file

its reply within two weeks from the date of this order.

(II) In view of clause 3.4.1.5 of RFP read with para-11(c) of the

Commission’s order dated 02-07-10 and para-7 of the Commission’s

order dated 15-09-10, the Commission sought clarifications from

UPPTCL about non-adoption of Swiss Challenge Method (SCM) even

when the originally quoted L-1 levelized tariff was above the benchmark

cost of the Project. UPPTCL could not reply satisfactorily. The

Commission directed UPPTCL to file its reply within two weeks from the

date of this order.

(III) In respect of Assessment Report of March 2011 on financial proposal of

RFP submitted by UPPTCL, the Commission observed that in 3rd para of

clause 2.5 of the above report, the benchmark tariff for Package-2 has

of 31

been wrongly mentioned as Rs 833.76Cr against the correct figure of

Rs 840.40Cr. Further, in the 5th para of the same report, ‘Isolux’ has

been mentioned as ‘L1 bidder’ for Package-2 whereas the correct L1

bidder is ‘Cobra-MEIL Consortium’. As such mistakes occurred in the

consultant’s report which has been considered by the BEC as the base

document for evaluating the RFP bids, therefore the Commission

considers it as ‘careless attitude’ shown by all concerned and directs

UPPTCL to submit its clarification under an affidavit within two weeks

from the date of this order.

(IV) UPPTCL vide letter dated 24-07-12 submitted the Board resolution for

undertaking of the parent company, ACS Servicios Comunicaciones y

Energia S.L.(annexure-8) in two sets and Board Resolution of the

Bidding Company, Cobra Instalactiones Y Servicios S.A. (annexure-8) .

It does not consist of the required board resolution of Cobra

Instalactiones Y Servicios SA for authorization to sign SPA as required

in the directions of the Commission issued vide its orders dated 19-03-

12 and 21-05-12.

Further the above Board resolution undertaking of ACS Servicios

Comunicaciones y Energia S.L and Board Resolution of the Bidding

Company, Cobra Instalactiones Y Servicios S.A., appear to be part of

RFP non-financial bid, submitted by the Consortium. If it is so, they

should have been made the part of TSA Schedule-10 under non-

financial bid. The Commission directs UPPTCL to file its clarification

under an affidavit within two weeks from the date of this order.

(V) The Commission after having gone through the certificate dated 18-07-12

about the Board of Directors of WUPPTCL, observed that even though

Cobra is the lead member of the consortium with 84% equity in

WUPPTCL (through Gomti), but it doesn’t have any representation in the

board of directors of WUPPTCL, whereas the majority share holders of

the other consortium partner (MEIL) are in the board of directors of

of 31

WUPPTCL. The Commission directs UPPTCL and WUPPTCL to file its

replies under an affidavit within two weeks from the date of this order.

(VI) The Commission observed that the Board Resolution dated 24-12-11 of

WUPPTCL for authorization to sign TSA, referred to the incorrect date of

SPA. UPPTCL vide letter dated 24-07-12 submitted the Board

Resolution of the same date (i.e. 24-12-11) of WUPPTCL, referring now

to the correct date of SPA.

The Commission directs UPPTCL and WUPPTCL to clarify how the

same board resolution dated 24-12-11 of WUPPTCL, can refer to both

correct and incorrect date of SPA.

(VII) The Commission asked UPPTCL to clarify why the business purpose,

mentioned in Article of Association of WUPPTCL (submitted with the

petition) refers to construction of Thermal Power Projects as well as

Super Thermal Power Projects. UPPTCL admitted that it was due to

some inadvertent typographical error but Memorandum of Association of

WUPPTCL, submitted vide letter dated 24-07-12, mentions the main

objects as EHV lines and substations

g) Submission of more documents

The Commission directed UPPTCL to submit the following documents within

two weeks from the date of this order:-

(I) An affidavit for publishing RFQ & RFP notices on the website of

UPPTCL and the Govt. along with the copies of newspaper cuttings for

publication of NIT with publication date, required under para-9.2 of

guidelines.

(II) An affidavit for opening the RFQ & RFP bids in public and in the

presence of representatives of bidders along with the copy of the

attendance sheet, having details & signatures of persons, present during

the opening of the RFQ & RFP bids, required under para-9.9 of

guidelines.

of 31

h) Provisions under Article 3.3 of TSA

The Commission inquired about the status of implementation of Article- 3.3

of TSA and directed both the parties UPPTCL & WUPPTCL to submit their

replies under an affidavit within two weeks from the date of this order.

18) The Commission directs UPPTCL and WUPPTCL to submit all the necessary

documents, as directed by the Commission in Para-17 within two weeks from

the date of this order. The Commission will review the status of the submission

of documents after two weeks and accordingly take a final decision on this

petition.

19) The next date of hearing in the matter, if any, shall be fixed after filing of all

documents and clarifications.

(Meenakshi Singh) (Shree Ram)

Member Member

Place: Lucknow

Dated: 18-03-2013