Private solar power companies have sought the intervention of Uttar Pradesh chief minister Yogi Adityanath in securing the award of contracts they won in February last year.
NV Vogt Singapore Private Limited, Al-Jomaih-Jakson Power Private Limited, Vijay Printing Press Private Limited, and Talettutayi Solar Projects Eight have been waiting to sign the contracts after they emerged as lowest bidders for supplying about 184 Mw solar capacity in reverse auctions held February last year.
As per bid documents, the letters of intent (LOI) was expected to be issued within 94 days of the e-reverse result but the companies have been thrice asked to extend the validity of bank guarantee.
“Since the completion of the reverse auction process, our members have been keenly waiting for the issuance of LOI from UPNEDA and Power Purchase Agreement (PPA) execution with Uttar Pradesh DISCOM so they could start the construction of their projects in full swing. Our members have been approaching UPERC, UPPCL, UPNEDA to raise this issue and requesting for the early issuance of the LoI but never received concrete response,” the National Solar Energy Federation of India (NSEFI) has said in its letter to Adityanath.
The federation said that since the completion of the auction, there has been instability in the prices of the raw materials and an abrupt increase in the prices of PV modules. The capital costs will increase due to delayed LOI issuance and PPA execution for these cash strapped developers during this pandemic time, the letter said.
The federation said further delay will pose a grave threat to the current and future investments in the state and will also leave Uttar Pradesh without the benefits of low electricity tariffs from these investors.
At the backdrop of this delay in issuing LOIs, in some of the tenders that were conducted consequently a reduced participation of international private players was observed. These tenders were undersubscribed and the capacity was only secured by the PSUs. Additionally there was no significant drop in the tariff discovered from previous bids too, which was not the case in tenders conducted across the country.
“With delayed issuance of LoI and lack in ease of doing business in the state, private players who earlier had big plans to invest in the state are refraining from bidding in projects, considering the challenges being faced with respect to difficulty in statute clearances are already planning to move to other states, reducing government’s revenue from GST,” NSEFI letter said.
