Petition No 797 of 2012 BEFORE THE UTTAR PRADESH ...€¦ · Power, Govt. of India (hereinafter...

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Petition No 797 of 2012

BEFORE

THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION

LUCKNOW

Date of Order : 2nd April, 2013

PRESENT:

1. Hon’ble Shri Shree Ram, Member

2. Hon’ble Smt. Meenakshi Singh, Member

IN THE MATTER OF:

Adoption of transmission tariff under Section 63 of the

Electricity Act, 2003 with respect to intra-state transmission

system, to be established by South East U.P. Power

Transmission Company Limited.

AND

IN THE MATTER OF

Petitioner South East U.P. Power Transmission Company Limited

Shalimar Titanium, 601-602, 6th floor, Plot no TC/G-1/1,

Vibhuti Khand, Gomti Nagar, Lucknow - 226010.

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

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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 Alfonso, Director, SEUPPTCL

5. Sri S.K. Bhattacharya, Director, Business Development, SEUPPTCL

6. Sri Ravinder Singh, CGM, SEUPPTCL

7. Sri R.L. Singh, GM, SEUPPTCL

8. Sri A.K. Ganesan, Advocate, SEUPPTCL

9. Sri S.S. Mehta, Consultant, SEUPPTCL

Order

(Date of Hearing 20.11.2012)

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

(SEUPPTCL) has filed this petition on 06-03-12 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 tariff with respect to the development of following intra-state

transmission system titled “765KV S/C Mainpuri-Bara line with 765KV/400KV

AIS at Mainpuri 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-Bara line with

765KV/400KV AIS at Mainpuri and associated Schemes/Works”

S.No. Name of the Transmission Element / Project

(I) Transmission lines

1 765kV SC Mainpuri - Unnao with Quad Bersimis (175Kms)

2 400kV DC (Quad Moose) Mainpuri (765kV) - Aligarh (120kms)

3 LILO of both circuits of 400kV DC Orai - Mainpuri (PG) at Mainpuri (765kV) with Twin Moose (30Kms)

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4 765kV 2x SC Mainpuri - Bara with Quad Bersimis (2x350kms)

5 LILO of 400kV Panki - Obra at 400kV Rewa Road with Twin Moose (12 kms)

6 400kV DC (Quad Moose) Rewa Road -Karchhana (30kms)

7 400kV DC (Quad Moose) Rewa Road -Meja (25kms)

8 400kV DC (Quad Moose) Bara - Meja (25kms)

9 400kV DC (Quad Moose) Bara -Karchhana (30kms)

10 400kV DC (Quad Moose) Tanda - Gonda (100kms)

11 400kV DC (Quad Moose) Gonda -Shahjahanpur (230kms)

12 LILO of 400kV Sarojininagar - Kursi Road (PG) at 400kV Sultanpur Rd, Lucknow with Twin Moose (20kms)

13 LILO of 400kV Obra - Sultanpur at 400kV Aurai with Twin Moose (15kms)

(II) Substations

1 2x1000MVA (765/400kV) AIS at Mainpuri

2 2x315MVA (400/220kV) GIS at Rewa Road

3 2x315MVA (400/220kV), 2x100MVA (220/132kV) AIS at Gonda

4 2x500MVA( 400/220kV), 2x160MVA, (220/132kV) GIS at Sultanpur

Road, Lucknow

5 2x315MVA ( 400/220kV), 2x160MVA(220/132kV) AIS at Aurai

(III) Bus Switching-Arrangement

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

400kV side

2 Rewa Road : Double Main Bus scheme for 400kV and 220kV side

3 Gonda : One & half breaker with double main bus scheme for 400kV, Double main and transfer scheme for 220kV & single main and transfer bus scheme for 132kV side

4 Sultanpur Road, Lucknow : Double Main Bus scheme for 400kV , 220kV & 132kV side

5 Aurai : One & half breaker with double main bus scheme for 400kV, Double main and transfer scheme for 220kV & single main and transfer bus scheme for 132kV side

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

petition:-

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(a) Letter of Intent (LOI) dated 05-07-11, issued by UPPTCL to M/s Isolux

Corsan CONCESIONES S.A. (hereinafter referred to as “Isolux” or

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

Mainpuri-Bara line with 765KV/400KV AIS at Mainpuri and associated

Schemes/Works” (hereinafter referred to as “Project” or “Transmission

System” or “Package-1”) specified under Tender Specification no ESD-765/4

(Package-1) and all its amendments thereof till the bid deadline.

(b) The Transmission Service Agreement (TSA) signed on 20-01-12 by

SEUPPTCL 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).

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 bidding process for selection of the Successful

Bidder as Transmission Service Provider (hereinafter referred to as “TSP”)

for construction, operation and maintenance of the transmission lines in the

Project on BOOT basis through tariff based competitive bidding process

under the guidelines of section 63 of the Act.

b) South East UP Power Transmission Company Ltd. (hereinafter referred to as

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

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

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

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

Successful Bidder.

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c) Subsequent to the process of competitive bidding conducted by BPC, M/s

Isolux Corsan Concesiones S.A. has been evaluated as the successful

bidder and in this regard a Letter of Intent (LOI) has been issued by the BPC

on 05-07-11. Thereafter the Transmission Service Agreement has been

signed on 20-01-12 between the Petitioner and the LTTCs of the

Transmission System.

4) While initiating the bidding process, UPPTCL had submitted that the selection of

the developer would be as per ‘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 Ministry of Power. After completion of the bidding

process and subsequent to the signing of SPA and TSA, UPPTCL submitted

that 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.

5) The Commission heard the above petition on 26-04-12 and directed UPPTCL

and SEUPPTCL vide its order dated 18-05-12, 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 three weeks 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.

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

vide its letter dated 07-06-12:-

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

of GoUP to act as Empowered Committee.

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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

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

and 30-03-11.

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k) Minutes of meeting of Energy Task Force (ETF) held on 24-02-10,

28-02-11 and 30-03-11 under Chairmanship of Chief Secretary, GoUP.

l) 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-1 to Isolux Corsan at levelized tariff of Rs 870 Cr.

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

hereunder:-

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

The meeting was held under the Chairmanship of IDC, GoUP against

transmission projects under PPP in specification no ESD/765/4. 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 of Additional Advocate General of GoUP.

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

ETF agreed with recommendations of Bid Evaluation Committee and

accorded its consent to issue RFP to Isolux Corsan Concesiones S.A. and

Cobra Instalactiones Servicios S.A.

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

ETF approved minimum benchmark price for Package-1 as Rs 833.76Cr.

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 is to be adopted.

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

The meeting was held under the Chairmanship of IDC, GoUP regarding

PPP transmission projects (Package-1) in specification no ESD/765/4. BEC

recommended to award Package-1 to Isolux Corsan at the levelized tariff of

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Rs 870Cr 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 Isolux Corsan for Package-1 was Rs 910.182Cr

which was the lowest and therefore Isolux was the lowest bidder in

Package-1 followed by Cobra. The consultant further pointed 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 might negotiate with L1-bidder. In view of the

recommendations of the consultant, BEC negotiated with L1 bidder which

agreed to reduce the levelized tariff to Rs 870Cr per annum which was still

4.35% higher than the benchmark levelized tariff approved by ETF. The

minutes further says that in view of large quantum of lines involving right of

way problems and expenses, the Bid Evaluation Committee accepted the

price above 4.35% over the benchmark price and placed its

recommendations before ETF.

e) 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-1 to Isolux Corsan at levelized tariff of Rs 870Cr and

directed to accord the approval of the Cabinet also before executing any

agreement with the bidder.

8) SEUPPTCL submitted the copies of the following documents to the

Commission vide its letters dated 30-04-12 and 07-06-12:-

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

Association and Certificate of Commencement of Business of

SEUPPTCL.

b) Board resolution of SEUPPTCL for authorization to sign Transmission

Service Agreement (TSA).

c) Board resolution of Mainpuri Power Transmission Private Limited for

authorization to sign Share Purchase Agreement (SPA).

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d) Board resolution of SEUPPTCL for amendment to Articles of Association

of SEUPPTCL.

e) Amended Articles of Association of SEUPPTCL.

f) Explanatory Statement of SEUPPTCL pursuant to section 173(2) of the

Companies Act, 1956.

g) Notice dated 22-03-12 issued by Registrar of Companies (RoC), Kanpur

to SEUPPTCL.

h) Reply of SEUPPTCL dated 01-06-12 to the Registrar of Companies.

i) Electronic copies of Form-32, 18, 23, 22B filed by SEUPPTCL in RoC.

9) Subsequent to the submission of a conformity certificate of Sri Nevneet Sehgal,

CMD UPPTCL in Feb’12, another conformity certificate dated 17-07-12 of Sri

Anil Kumar Gupta, Principal Secretary, GoUP, has been submitted to the

Commission. However, the Commission directed UPPTCL, vide letter dated 27-

07-12, to submit the Certification of Bid Evaluation Committee at the earliest.as

per requirement of guideline.

MD UPPTCL, vide letter dated 30-07-12, intimated the Commission that BEC

was formed by Empowered Committee with a specific purpose for evaluation of

bids and after the completion of process of evaluation, BEC is not in existence.

He further added that RFQ & RFP evaluation reports as cleared by BEC, ETF &

UP Govt. along with all related minutes of meeting have already been submitted

to the Commission and therefore the certification by Principal Secretary

(Energy) should suffice the requirement envisaged under para-12 of Guidelines.

In light of this, MD UPPTCL requested the Commission to accept the certificate

already submitted by Principal Secretary (Energy) Govt of U P.

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

order dated 18-05-12 and subsequent letters dated 27-07-12 & 08-08-12, the

certification by the Bid Evaluation Committee has not been 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.

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

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

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

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

11) 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:-

i. After the finalization of the tender and against the provisions of TSA/RFQ,

the State Energy department / UP Power Transmission Corporation Limited

has constituted a committee to change the conductor to AAAC in place of

ACSR Moose & Bersimis, which is not in line with clause 9.6.4 of the

bidding guidelines and the provisions of Central Vigilance Commission. In

view of this, any consideration for tariff adoption is against the bidding

guidelines.

ii. There is a provision in clause 12.4 of Tariff based Competitive Guidelines of

GOI that 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. It confirms that unless the

Commission looks into the certification by Bid Evaluation Committee, it is

not possible to conclude that the bidding process was transparent.

iii. The Commission will adopt the tariff under section 63 of Electricity Act 2003

after ensuring that the bidding guidelines of GOI have been followed. The

present process itself says that it is not transparent therefore the

Commission needs to pay its attention on above points.

Similarly an intervener application on behalf of Sri Rama Shankar Awasthi

has been filed on 20-11-12 at 3:30pm. Since the application of Sri Awasthi was

received after the hearing even then the Commission has taken it on the

record. The contents of this application are reproduced below:

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a. The present Intervener Application is being filed in the present

proceedings being petition No. 797/2012.

b. That it may be stated that as per clause no.12 (a) electricity act 2003 no

person shall transmit electricity unless he is authorized to do so by a

license issued under section 14 or is exempt under sec.13.

c. That as per information received by the applicant till today Commission

has not granted transmission license to South East U.P. Power

Transmission Company Limited and nor exempted for transmission

license on the recommendation of the appropriate govt. in accordance

with the national policy formulated under section 5 in public interest,

direct, by notification that subject to such conditions and restrictions.

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

for transmission services approved by Ministry of Power, GOI, and 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 is pursuing to State Govt. and UPPTCL FOR change of ACSR

Moose and Bersimis conductor to AAAC Conductor. So it is a clear cut

violation of TSA guideline.

e. 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.

f. As per my knowledge Bid Evaluation Committee are not forwarded

Certificate to commission.

g. That as per clause no. 61 read with 181 UPERC framed Terms and

condition for Transmission Tariff Regulation 2006.

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h. That clause no 1.2.1. says that These regulations shall apply, for the

purposes of ARR filing and tariff determination, to all the transmission

licensees including deemed Transmission Licensees within the State of

Uttar Pradesh.

i. That clause no. 2.1.1. says that The Transmission Licensee shall file the

Aggregate Revenue Requirement (ARR) petitions complete in all respect

along with requisite fee as prescribed in the Commission’s Fee and Fine

Regulations on or before 30th November of each year containing the

details of the estimated expenditure and the expected revenue that it may

recover in the ensuing financial year at the prevailing tariff. Information

as per formats specified in Annexure A to these regulations shall form

part of the ARR filings.

j. That as per clause no. 2.3.2 of Transmission Tariff Regulations 2006

says that after receipt of required information, the UPERC may take

appropriate orders regarding admittance of petition, initiation of

proceedings and determination of ARR / Tariff in accordance with the

provisions of its Conduct of Business Regulations. The licensee shall,

within 7 days of the issuance of the admittance order by the Commission,

publish the salient points of the ARR/Tariff petition in such abridged

format and manner, as approved by the Commission, in at least two

national daily newspapers (one English and one Hindi) circulated in its

area of operation for public objections/suggestions/comments.

k. That as per provision of electricity act 2003 and transmission tariff

regulation 2006 petition of transmission charges can file only

transmission licensee and in this case when commission are not grant

transmission license to south east U.P. Power Transmission company

limited then how commission can accept transmission charges petition of

South East U.P. Power Transmission company limited.

l. That UPERC might have appreciated that transmission licensee was

obliged to publish ARR data in News Paper for public objections/

suggestions as per provisions of clause no.2.3.2 of Transmission Tariff

Regulations 2006.

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m. That the action of the Transmission Licensees is against the provisions of

the Electricity act 2003 and transmission tariff regulations 2006 as well as

the ratio laid down by the Court/Tribunal in this regard.

n. That the action of the Transmission Licensees is against the provisions of

the Electricity act 2003 and transmission tariff regulations 2006 as well as

the ratio laid down by the Court/Tribunal in this regard.

o. That the issues involved in the aforesaid proceedings is of public

importance. The State exchequer has to suffer huge loss due to the non

compliance of the mandatory provisions of law.

p. 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 also observed that Sri Dhruv Kumar, Advocate and Sri

Sarthak of Prastav Dainik also signed the attendance sheet of the hearing but

as they did not represent either UPPTCL or SEUPPTCL, therefore the

Commission did not permit them to attend the hearing.

12. 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 Transmission Customers (LTTCs). It is the distribution

companies who jointly signed the Transmission Service Agreement (TSA)

with SEUPPTCL and from whom the costs would be recovered during the

entire term of 35 years of TSA.

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13. 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.

14. 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 after 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 Bid Evaluation Committee to be forwarded to the

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

dated 18-05-12, the Commission inquired why the required Certification of

BEC has not been submitted so far by UPPTCL.

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

been submitted to the Commission; one issued by CMD UPPTCL in Feb’12

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

that the State Govt. has formed the Bid Evaluation Committee, convened all

its meetings and conveyed all its decisions. UPPTCL has no role in all these

processes. UPPTCL neither formed BEC nor convened its meetings. He

submitted that Secretary (Energy) in his certificate dated 17-07-12 has

certified that the bid process & bid evaluation took place as per the

Guidelines of GOI. Sri Chowdhary further submitted that since the Bid

Evaluation Committee is not in existence after the evaluation of bids and all

the relevant documents - BEC minutes, ETF minutes etc have already been

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submitted to the Commission, therefore the certificate issued by Secretary

(Energy) may be accepted by the Commission.

The Commission emphasized the need of the Certification by Bid Evaluation

Committee only and inquired categorically why UPPTCL, in its capacity of

BPC, could not obtain the same? UPPTCL was unable to put forth any valid

reason for the same. On the instruction of the Commission, Sri Gupta of

UPPTCL read the provision of section 63 of the Act, the relevant clause of

the guidelines of GOI. He also read 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 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.”

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The Commission clarified UPPTCL that as per the guidelines of GOI,

as read above the Certification by Bid Evaluation Committee is required. 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 and could not 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-1 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, within two weeks from the date of this order. It

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

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

Tariff.

b) Use of Conductor in the Project

The Commission has addressed this issue in the same petition earlier also

vide its order dated 18-05-12 when a letter was submitted by SEUPPTCL,

one day before the first hearing in this petition, stating that SEUPPTCL is

planning to use All Aluminium Alloy Conductor (AAAC) conductor in the

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implementation of the Project. The Commission took up this issue in the

hearing on 26-04-12 and accordingly conveyed its decision vide para-6 of

the order dated 18-05-12 that it did not agree to any amendment of the

specifications of the project after the completion of the bidding process.

Subsequently, in reference to another letter dated 29-05-12 of SEUPPTCL,

the Commission issued a letter dated 11-06-12 and denied any amendment

of para-6 of its order dated 18-05-12. It is relevant to mention here that the

Commission had rejected the similar request of Western UP Power

Transmission Company Limited (WUPPTCL) vide its order dated 19-03-12 in

petition 782/2012, who are the successful bidder for the development of

package-2 and whose petition for the adoption of transmission charges

under section 63 of the Act is pending before the Commission. In its petition

WUPPTCL had requested for approval of certain deviations including an

option for use of Bersimis-equivalent AAAC and Moose-equivalent AAAC for

765kv and 400kv lines respectively instead of using only ACSR Bersimis &

ACSR Moose conductors mentioned in the bid documents and accordingly

sought amendments in relevant clauses of RFP & TSA documents. UPPTCL

had strongly objected their request to use Bersimis & Moose equivalent

AAAC in place of ACSR conductor because the benchmark price of the

project cost was worked out at the bidding stage with the use of ACSR

conductors. AAAC even if found technically better, has the financial

implications, affecting the overall price structure of the project and it cannot

be allowed at post bid stage.

The relevant portions of the Commission’s orders dated 18-05-12, 19-03-12

and letter dated 11-06-12 are being reproduced as hereunder:-

Order dated 18-05-12 in petition no 797/2012

“(6) In reference to the letter submitted by SEUPPTCL on 25-04-12,

stating that it shall use ‘All Aluminum Alloy Conductor’ (AAAC) for the

establishment of the project, instead of the conductor specified in the

bidding documents, the Commission held that at this stage when the

bidding process has been completed and the Letter of Intent (LOI) has

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been issued by the BPC to the successful bidder, the Share Purchase

Agreement (SPA) has been signed by the concerned parties and the

Transmission Service Agreement (TSA) has been executed between

SEUPPTCL & the Long Term Transmission Customers (LTTCs) it cannot

agree to any amendment of specifications of the project.

In view of above, the Commission does not take cognizance of the said

letter dated 24-04-12 of SEUPPTCL.”

Letter dated 11-06-12 addressed to SEUPPTCL

“Please refer to the clause 1.3 of RFQ and 1.5(a) & 2.14.2.4 of RFP

documents. The survey report provided to you by the Bid Process

Coordinator (UPPTCL) at RFQ stage explicitly mentions that ACSR

conductors are to be used. Besides, after issuance of LOI, amendment in

the specifications is not permissible, as mentioned in the Commission’s

order dated 18-05-2012. As such I am directed to inform you that

modification of para-6 of the said Commission’s order is not required.”

Order dated 19-03-12 in petition no 782/2012 of WUPPTCL

“5(c) Use of other equivalent type of transmission line conductors The petitioner is of the view that Indian utilities have been specifying and

using ‘Bersimis equivalent’ and ‘Moose equivalent’ All Aluminium Alloy

Conductor (AAAC) instead of ACSR due to the benefit of lower losses,

lower weight and lower sag and therefore requested that an option may be

given for use of ACSR/AAAC Bersimis/Bersismis-equivalent and

Moose/Moose-equivalent conductors for 765kv and 400kv lines

respectively, instead of using only Bersimis and Moose conductors,

mentioned in bid documents and accordingly relevant clauses of RFP &

TSA may be amended.”

“6)

……..

UPPTCL strongly objected the petitioner’s request to use Bersimis &

Moose Equivalent AAAC conductor in addition to ACSR conductor, as the

benchmarking of project cost had been carried out at bidding stage with

the use of ACSR conductor as per CERC guidelines. They further

reiterated that any such deviation, at this stage, is not possible as the

equivalent AAAC conductor requires technical suitable study, which even

if found technically better, has the financial implications also and hence

may affect the overall price structure of the project.

……..”

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“8) Having heard the deliberations of both the petitioner (WUPPTCL) and

the Bid Process Coordinator (UPPTCL) with due consideration to their

written submissions, the Commission finds that all the issues raised by the

petitioner require amendments in RFP & TSA documents, on the basis of

which, the BPC processed the entire competitive bidding. The

Commission affirmed that as of now it is not going into the merit of the

transparency of the competitive bidding process and asserted that the

same is being taken up separately while considering the petition for

adoption of tariff of package-2. Having said that, the Commission is of the

firm view that in light of the fact that the bidding process has been

completed by the BPC, the Letter of Intent (LOI) has been issued to the

successful bidder, the Share Purchase Agreement (SPA) has been signed

by the concerned parties and the Transmission Service Agreement (TSA)

has been executed between the petitioner and the Long Term

Transmission Customers (LTTCs), the Commission, at this stage, cannot

accord approval to further amend the RFP & TSA documents, on the basis

of which the entire bidding process took place.

9) In view of above, the Commission does not deem it fit to approve now

the amendments sought in this petition.”

Subsequent to its order dated 18-05-12 and letter dated 11-06-12 in this

petition, the Commission observed that several letters, pertaining to use of

the conductor in the Project, were submitted by UPPTCL and SEUPPTCL to

the Commission to resolve the issue of conductor. It made the Commission

understand that the issue is still not settled among the parties, causing

undue delay in the progress of the Project. As the transmission system under

this Project is linked with the evacuation of power of upcoming thermal

power projects (Bara, Karchana, Meja etc) and any delay in its execution

may hamper the evacuation of power from these thermal projects, causing

the consumers of the state to suffer ultimately, therefore the Commission

decided to intervene in the matter. Accordingly, the letters which have been

addressed by the UPPTCL and SEUPPTCL to the Commission to address

the issue of Conductor are being taken on record and have been made the

part of the Petition. SEUPPTCL sent letter No. 109 dated 18.7.2012, letter

dated 12.7.2012. UPPTCL wrote to the Commission letter No. 952 dated

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30.07.2012, letter No. 930 dated 25.07.2012 to settle the issue of Conductor.

There are other letters also on the issue between both the parties regarding

this issue. The letters from UPPTCL to SEUPPTCL are No. 952 dated

30.07.2012, No. 1007 dated 28.08.2012, No. 989 dated 14.08.2012. The

letters from SEUPPTCL to UPPTCL are dated 31.08.2012, dated 1.08.2012,

letter No. 108 dated 18.07.2012 on the issue.

Full text of the two letters one of SEUPPTCL dated 18.07.2012 and one of UPPTCL dated

25.07.2012 is reproduced here:

SOUTH EAST U.P. POWER TRANSMISSION COMPANY LIMITED

Shalimar Titanium, 601-602, 6th

Floor, Plot No. TC/G-1/1,

Vibhuti Khand, Gomti Nagar,

Lucknow – 226010, Uttar Pradesh

SEUPPTCL/UPERC/2012-13/109 18-7-2012

The Secretary,

U.P.Electricity Regulatory Commission,

Kisan Mandi Bhawan,

Vibhuti Khand,

Gomti Nagar,

LUCKNOW – 226010

Dear Sir,

Sub: Tender specification ESD 765/4(Package 1) : Establishment of Transmission System

For 765kV S/C Mainpuri – Bara Line with 765/400kV A.I.S. at Mainpuri and Associated

Schemes/Works.

Reg: Use of All Aluminum Alloy Conductor

We refer to our letter SEUPPTCL/UPERC/2012-13/dated 12.7.2012 addressed to you, and

would like to re-iterate the following:

1. Isolux Corsan Concessiones S.A. (hereinafter referred to as ICC) was selected as the

successful bidder for the development, operation and maintenance of the Transmission

System for 765 kV S/C Mainpuri – Bara Line with 765 kV/400 kV AIS at Mainpuri

and Associated Schemes/work. The bids were invited by the Uttar Pradesh Power

Transmission Corporation Limited (UPPTCL) in the year 2010. The bids invited under

Section 63 of the Electricity Act, 2003 based on the competitive bidding documents

notified by the Government of India.

2. The bidding documents issued by UPPTCL consisted of the Request for Qualification

(RFQ), Request for Proposal (RFP) and also the draft of the Transmission Services

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Agreement to be entered into by UPPTCL with the successful bidder. The bidding

documents detailed out the terms and conditions of the bidding process and the rights

and obligations to be vested on the successful selected bidder. The terms and

conditions also included the scope of work required to be undertaken by the successful

bidder. The Scope of work provided for in the RFQ is as under:

Sl. No. Transmission System for 765kV S/C Mainpuri-Bara Line with 765mV/400 AIS at

Mainpuri and Associated Schemes/Work

1. Transmission Lines:

1. 765kV Sc Mainpuri – Unnao with Quad Bersimis

(191 ms)

SOUTH EAST U.P. POWER TRANSMISSION COMPANY LIMITED

Shalimar Titanium, 601-602, 6th

Floor, Plot No. TC/G-1/1,

Vibhuti Khand, Gomti Nagar,

Lucknow – 226010, Uttar Pradesh

2. 400 kV DC Quad Moose Mainpuri – Aligarh (120 Kms.)

3. 400 kV DC Twin Moose Mainpuri (765 kV)- Mainpuri (PG) (30 kms)

4. LILO of 400 kV Agra – Agra (PG) at 765 kV Mainpuri

With Twin Moose (90 kms)

5. 765 kV 2xSC Mainpuri – Bara with Quad Bersimis (2x351 kms)

6. LILO of 400 kV Panki – Obra at 400 kV Rewa Road with Twin Moose (12 kms)

7. 400 kV DC (Quad Moose) Rewa Road-Karchhana (20 kms)

8. 400 kV DC (Quad Moose) Rewa Road – Meja (25 kms)

9. 400 kV DC (Quad) Bara-Meja (20 kms)

10. 400 kV DC (Quad Moose) Bara-Karchhana (20 kms)

11. 400 kV D/C (Twin Moose) Tanda-Gonda (100 kms)

12. 400 kV D/C (Twin Moose) Gonda- Shahjahanpur (230 kms)

13. LILO of 400 kV Sarojininagar –Kursi Road (PG) at 400 kV Sultanpur Rd.,

Lucknow with Twin Moose (20 kms.)

14. LILO of 400 kV Obra-Sultanpur at 400 kV Aurai with Twin Moose (15 kms)

II. Sub-Stations:

1. 2X1000MVA, 765/400 KV AIS Mainpuri

2. 3x315QMVA, 400/220kV GIS at Rewa Road

3. 2X315MVA, 400/220kV, 2X100MVA, 220/132Kv AIS

At Gonda AIS

4. 2X500MVA, 400/220Kv, 2X160MVA, 220/132kV AIS at Sultanpur Road,

Lucknow AIS

5. 2X200MVA, 400/132kV AIS at Aurai

III. Switching-stations:

1. Mainpuri: One & half breaker scheme for 765&400kV sides and two main

and transfer scheme for 220kV side

2. Rewa Road: One & half breaker scheme for 400 kV side and two main and

transfer scheme for 220 kV side

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3. Gonda: One & half breaker scheme for 400 kV and two main and transfer

scheme for 220kV & single main and transfer bus scheme for 132kV side

4. Sultanpur Road, Lucknow: One & half breaker scheme for 400 kV and two

main and transfer scheme for 220kV & single main and transfer bus scheme

for 132 kV side

5. Aurai: One & half breaker scheme for 400 kV & single main and transfer bus

scheme for 132 kV side

2. The bidding documents required the successful bidder to establish the transmission

system to optimum capacity and based on best utility practices. The bidding documents

did not provide for the nature of the equipments or materials to be used, but left the

same to be decided by the successful bidder. The RFP, inter-alia, provided as under :

“1.3 The TSP shall ensure that design, construction and testing of all equipment,

facilities, components and systems of the Project shall be in accordance with Indian

Standards and Codes issued by Bureau of Indian Standards and only in case they are

not available under certain conditions the other equivalent internationally recognized

Standards and codes shall be followed, with prior approval of CEA.”

3. ICC was adjudged the successful Bidder and was issued a letter of Intent by UPPTCL

on 5th

July, 2011. Subsequently, after completing required formailities, ICC took over

the SPV South-East U.P.Power Transmission Company Limited from UPPTCL.

4.

5. Upon being issued the letter of Intent, ICC began the process of detailed survey of the

line route and all other technical details including the equipment to be procured for the

transmission system. ICC had drawn up the broad technical parameters that would be

the guide line for the engineering/design activities for the transmission system to be

constructed by Isolux. As a part of the bidding exercise, the UPPTCL had only

provided a limited and non-binding survey report for certain lines with the specific

disclaimer that it was for the bidders to conduct their own surveys and not depend in

any manner on the information provided in the bidding process.

6. In the technical parameters finalized by the ICC, the conductor to be used was the All

Aluminium Alloy Conductors (AAAC) type of conductor, based on which the various

technical studies were undertaken by ICC. The AAAC type of conductor was preferred

by ICC over the other prevalent type of conductor, namely the ACSR type of

conductors even though AAAC conductors were more expensive as compared to the

ACSR conductors, on account of the various advantages of the AAC conductors

including the following :

A. Power Losses: Power losses, attracted by Steel, are less in AAAC, which consists

of Aluminium Alloy only, due to absence of magnetic loss. This is grater in ACSR,

the same being attracted by the steel core.

B. Thermal Stability: In ACSR which consists of pure Aluminium occurs at

termperatures exceeding 85 deg C, whereas AAAC, which consists of Aluminium

Alloy only, is stable even at 100 deg C.

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C. Surface harness: In AAC, Surface Harness is nearly 80 BHN as compared to 35

BHN for pure Aluminium. Surface damage during handling is reduced

considerably for AAC, leading to lesser Corona and Radio Interference in EHV and

UHV Transmission Lines using AAAC.

D. Corrosion Resistance Capability: AAAC has a high corrosion resistance capability

since it consists of Aluminium Alloy only, and unlike ACSR, there is no steel core

which is an aggravating factor for inviting corrosion.

E. Ultimate Tensile Strength: UTS of AAAC is 30% higher than that of ACSR.

F. Use of AAAC: this is now used worldwide and is preferred over ACSR by most

Utilities for the various advantages noted herein. In India, CEA has also

recommended to all Utilities to use AAAC in place of ACSR.

7. The Central Electricity Authority had also by its circular dated 20.08.2008 had also

recommended the AAAC conductors over the ACSR conductors in view of the various

technical advantages. A copy of the circular of the Central Electricity Authority is

attached hereto and marked as Annexure A.

8. However, the UPPTCL by its communication dated 30.08.2011 stated that the bid

conditions allegedly provided for ACSR conductors as opposed to AAAC conductors

and called up ICC to provide the technical details of ACSR conductors. A copy of the

communication dated 30.08.2011 of UPPTCL is attached hereto and marked as

Annexure B.

9. In reply to the above, ICC vide its letter dated 14.09.2011 provided the various

advantages of AAAC conductors and stating that in view of the various advantages it is

more appropriate to use AAAC conductors for the transmission project. A copy of the

communication dated 14.09.2011 of ICC is attached hereto and marked as Annexure C.

10. However, UPPTCL has been taking the position that the bid allegedly only provided for

the use of ACSR type of conductors and has not been accepting the justifications

provided for by ICC including that there was no stipulation in the bidding conditions

regarding the use of any particular type of conductors. Copies of the correspondence

exchanged between the parties is attached hereto and marked collectively as Annexure

D.

11. ICC has time and again specifically referred to the various advantages of the AAAC

type of conductors and has also confirmed that despite its higher cost, ICC shall not be

claiming any additional charges for the use of the AAAC type of conductors. The only

contention of UPPTCL is that in the survey report which was provided to the bidders at

one place the term ACSR conductor is used while providing for the Sag tension

calculation and therefore the ACSR conductors is to be treated as a part of the bidding

conditions and ICC is seeking a divation from the same which is not permissible.

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12. It is submitted that there was no such condition in the bidding documents and on the

other hand the bidding documents specifically provided that the bidder shall choose the

technical parameters and equipment consistent with the codes and standards of the

Bureau of Indian Standards and other acceptable codes with the prior approval of the

Central Electricity Authority. With regard to the survey report, the bidding documents

itself specifically provide for a disclaimer for the contents of the survey report and it is

for the bidders to ensure proper surveys are conducted. In the circumstances, by no

stretch of imagination can it be contended that the use of the ACSR conductor was a

mandatory condition of the bid. It is also submitted that the said contention of

UPPTCL is absurd in as much as AAAC is technically much superior to ACSR

conductors and it is more recommended to use than the ACSR conductors.

13. It is submitted that there is no justification or rationale in the contention taken by

UPPTCL that the bid documents mandates the use of only ACSR type of conductors

and that the use o AAAC conductors contrary to the bid. There is no such stipulation in

the bid conditions or any provision in the bidding documents which mandates the

parties to procure and use any particular type of equipments. The Survey Report being

relied only UPPCL is firstly only indicative and further there is a specific disclaimer in

the bidding documents for the bidders not to rely on the reports and information being

made available and to conduct their own investigations and surveys.

14. ICC has proposed the use of the most suitable and advanced technology presently

available and feasible to be implemented, namely the AAAC type of conductors, which

is also recommended by the Central Elecri9city Authority and also satisfies the

standards of the Bureau of Indian Standards, which is the only condition as mentioned

in the bidding documents. ICC has also specifically confirmed that the use of AAC

type of conductors is as per the bidding documents and that ICC will not claim or

otherwise be entitled to any higher tariff on account of the use of AAC type of

conductors rather than the ACSR type of conductors. In any event, there is no

prohibition in the bidding documents from use of the AAC type of conductors or there

can be any objection or reservation from the use of a better technology by the

successful bidder at the same quoted price.

15. However, in view of the objections being taken by the UPPTCL and their insistence

that ICC is required to use only the ACSR type of conductors, it has become necessary

for ICC to represent before the Hon’ble Commission and seek directions from the

Hon’ble Commission on the use of the AAAC conductors by ICC in the transmission

system is question.

16. In the facts and circumstances mentioned above, it is respectfully prayed that the

Hon’ble Commission be pleased to :

a. Clarify and declare that the bidding documents does not provide for any mandatory

condition for use of ACSR type of conductors or that the use of AAAC type of

conductors or prohibited under the bidding documents.

b. Hold that the objection of UPPTCL regarding the use of AAAC type of conductors

is incorrect and untenable.

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c. Pass such other order(s) as the Hon’ble Commission deem just in the facts of the

present case.

Thanking you,

Yours faithfully,

For South East U.P. Power Transmission Company Limited

Alfonso Perez Bustamante Queipo de LIano

Authorized Signatory

U.P. Power Transmission Corporation Ltd.

Shakti Bhawan

14-Ashok Marg

Lucknow

No.930/ESD-765kV/PPP/4/Isolux/vol-2 Dated:25-07-2012

Subject: Use of All Aluminium alloy conductor: for consideration of 765kV

& 400 Transmission lines under PPP package-1

Secretary,

U P Electricity Regulatory Commission,

Kisan Mandi Bhawan, Vibhuti Khand,

Gomti Nagar,

Lucknow.

Dear Sir,

This is in reference to M/s SEUPPTCL letter no.

SEUPPTCL/UPERC/2012-13/109 dated 18.07.2012 addressed to Hon’ble

Commission and a copy endorsed to MD, UPPTCL. In this regard point

wise submissions are as below:

1. No Comments.

2. 2. It may be seen from the scope of work detailed by M/s

SEUPPTCL (as also available in schedule 2 of TSA) that type of

conductor has been clearly mentioned as Quad BERSIMIS for 765kV

line and as Quad/Twin Moose for 400kV transmission lines to be

constructed under PPP package-1. Hon’ble Commission may further

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note that BERSIMIS and MOOSE are standard “Code Names” for

ACSR conductors as given in Canadian Standard and British Standard

215 Part-2 respectively (copies of relevant pages are enclosed

herewith as Annexure-1 for ready reference). It is also relevant to

mention here that no other International or National standard

defines/follows these code names. Accordingly, wherever under the

scope of work, the conductors have been mentioned as BERSIMIS

and MOOSE the same are to be understood to mean ACSR

BERSIMIS or ACSR MOOSE conductors only. Further, neither the

RFP documents nor the TSA allow use of equivalent conductors as

has also been observed by the Commission in its orders dated

18.05.2012 and 11.06.2012.

The word “AAAC MOOSE” and AAAC BERSIMIS” is a creation of M/s

SEUPPTCL as “AAAC MOOSE” and AAAC BERSIMIS” are not

defined in any International or National standards. Accordingly, letter

no.ICI/UPPTCL (BOOT)/2011-12/3228 dated 19.07.2011 (copy

enclosed) for adoption of conductors with parameters of AAAC

MOOSE Equivalent and AAAC BERSIMIS Equivalent is in deviation to

RFP documents and the order of Hon’ble Commission.

3. With regard to submission made by M/s SEUPPTCL that bidding

document did not provide for nature of equipment or material to be

used, it is to clarify that as per the order of the Commission

benchmarking of cost of the project was done considering ACSR

MOOSE and ACSR BERSIMIS conductors only and accordingly

conductors have been mentioned as MOOSE and BERSIMIS in RFP

documents and Schedule-2 of TSA which defines the “Scope of Work”.

In line with above, 765 kV Line Survey Report also indicates the

conductor as ACSR BERSIMIS conductor which was integral part of

the RFQ/RFP documents. In this context it is relevant to mention that

the Hon’ble Commission has also treated the request of bidder to use

AAAC conductors to be in deviation to the RFP documents in its orders

dated 18.5.2012 & 11.06.2012.

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It is also to bring to the knowledge of the Commission that the firm has

misinformed that the conductor selected by them are having main

parameters as per IS 398 part-4. The 1573.71 kg/km weight and

0.598 ohms/km resistance of AAAC conductors corresponds to a

conductor strand diameter of 3.45 mm instead of 3.55mm mentioned

by them (Refer page 3 of IS 398 part-4). Similarly the parameters of

AAAC conductor having 61 strands and 3.89mm diameter, has not

been defined in the above IS. It indicates that they have selected

parameters of AAAC conductors arbitrarily and have designed the

towers on the basis of these arbitrarily selected parameters. An

adequate tower designing is also not possible without defining correct

parameters of conductors.

With regard to para 1.3 of the RFP quoted by M/s SEUPPTCL it is to

submit that it is for the details which are not covered under the scope

of work. However, for the system and/or parameters that are clearly

defined under the bidding documents and scope of work the developer

does not have the flexibility to change them. For example, if it has

been provided under the scope of work that a substation is to be

constructed with one and half breaker scheme, it cannot be modified to

double main and transfer scheme etc. Accordingly, wherever MOOSE

and BERSIMIS conductors have been mentioned in the bidding

documents and the TSA, the construction details of conductors and

their mechanical & electrical parameters stand specified as per their

respective standards.

4. No comments.

5. The contention of the bidder that UPPTCL had only provided limited

and non-binding survey report is incorrect. The basic understanding

since the conception of the project was that the transmission lines

under the PPP packages would be constructed using ACSR

conductors and accordingly benchmarking of cost was done as

explained in Pt-3 above. In the bidding documents and the TSA, the

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conductors have been mentioned as MOOSE and BERSIMIS because

these are standard code names of ACSR conductors only as explained

under Pt.2 above.

6. With regard to superiority of AAAC conductors over ACSR conductor

as made out by M/s SEUPPTCL, following is brought to the knowledge

of the Commission:

a. Power losses: It is to inform that the DC resistance at 20 degree C of

proposed AAAC MOOSE equivalent conductor and AAAC BERSIMIS

equivalent conductor (as per SEUPPTCL letter dated 19.07.2011) are

0.0598 ohm/km & 0.0472 ohms/km respectively. However the DC

resistance at 20 degree C of ACSR MOOSE & BERSIMIS conductors

is 0.055520 ohms/km & 0.04242 ohms/km respectively. As such

AAAC equivalent conductor selected by M/s SEUPPTCL have 7.7%

and 11% higher resistance in comparison to MOOSE & BERSIMIS

conductors respectively. Thus, the transmission losses with AAAC

MOOSE equivalent and AAAC BERSIMIS equivalent would be 7.7%

and 11% more with respect ACSR MOOSE and ACSR BERSIMIS

conductors. The impact of skin effect of ACSR conductors and AAAC

conductors is almost same for determining the AC resistance. (Refer

IEC 61597). Hence, it may not affect in the calculations of “difference

in line losses” due to AC resistance of BERSIMIS & MOOSE

Conductors and AAAC conductors on percentage basis.

However, the temperature coefficient of Resistance is 0.0040 and

0.0036 of ACSR and AAAC conductors respectively. With the increase

in temperature (above 20 degree C) the losses will be reduced in

AAAC conductors with respect to ACSR conductors and the difference

will be less than 1% in the operating temperature range. This cannot

offset the effect of higher DC/AC resistance in AAAC conductor.

Further, due to higher strength to weight ratio of AAAC conductors,

longer spans of transmission line are feasible, reducing the number of

towers in transmission lines. As a result, which SEUPPTCL will save

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on their capital cost, LTTC will have additional commercial burden due

to higher transmission losses.

b. Thermal Stability: It has been mentioned by M/s SEUPPTCL that

lines with all Aluminium Alloy would be stable even at 100 degree c. It

is to submit that lines constructed with quad conductors are fully

loaded with respect to their surge impedance loading and conductor

never reach to their thermostability limit and accordingly there is no

possibility of these lines reaching a temperature beyond 75 degree.

Hence higher thermal stability limit of AAAC conductors cannot be

taken advantage off in 765kV & 400kV lines.

c. Surface harness: No Comments.

d. Corrosion Resistance Capability: The MOOSE & BERSIMIS

conductors are having galvanized steel core, which is corrosion free.

Further, lines with ACSR MOOSE and BERSIMIS conductors have

withstood the test of time and are performing satisfactorily in the whole

world.

e. Ultimate Tensile strength: The equivalent AAAC MOOSE conductor

selected by M/s SEUPPTCL is having UTS of 158.66kN against

161.20kN of ACSR MOOSE conductors. Hence the statement of

SEUPPTCL does not hold good.

f. Use of AAAC: As no 765 kV lines has been constructed using AAAC

conductor by PGCIL or any other state transmission utility including

UPPTCL, their performance under Indian conditions is no time tested.

7. With regard to submission by M/s SEUPPTCL that CEA has

recommended use of AAAC conductors it is to submit that in spite of

such recommendation by CEA from last 4 years, PGCIL has not

constructed any 765kV line using AAAC conductors. As per

information gathered from field units in UP Power sector, AAAC

conductors get permanently elongated when fully loaded thus reducing

the clearance at many places.

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CEA in their letter no. SETD/421-A/2008/617-678 dated 20.08.2008

(copy enclosed) has mentioned that AAAC conductor has some

advantage over ACSR conductor such as lower power loss, higher

current rating, lesser weight, lower sag, lighter tower design, corrosion

resistance longer life. Accordingly AAAC conductor parameters are

required to be selected in such a way that better strength & lower line

losses are achieved. M/s SEUPPTCL have proposed the use of AAAC

conductors which are having more losses as mentioned above. The

equivalent conductors have been selected arbitrarily without any

equivalence of all the electrical properties and do not match with

conductor parameters specified in IS 398 part-4.

8. No Comments.

9. May please refer to submission made on pt.2, 3,5,6,7 above.

10. May please refer to submission made on pt. 2, 3, 5 above.

11. It is in-correct on the part of M/s SEUPPTCL to state that they are

incurring higher cost transmission lines with AAAC conductors.

In this context it is to submit that the developer is intentionally trying to

mislead the Commission by saying that they will have to incur higher

cost for construction of lines using AAAC conductors.

Due to lower weight of AAAC conductors and better weight to strength

ratio M/s SEUPPTCL would have huge savings in the overall line

construction cost, as the same would help SEUPPTCL in having longer

span between towers and allow use of towers with lesser weight and

light foundations. Further, such a change, if allowed, to M/s

SEUPPTCL would be dispute prone, as Commission has earlier

disallowed M/s WUPPTCL use of AAAC conductors, considering it to

deviation from the RFP documents. M/s WUPPTCL has already

proceeded with the design towers with ACSR conductors mentioned in

the scope of work.

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12. Disclaimer in the line survey report is a general disclaimer to safeguard

the interest of both parties because of any inadvertent error. However,

the same cannot be interpreted to mean that developer has the

flexibility to change the conductor type base on which benchmarking of

cost of the project was done. Further, from the point of LTTC’s AAAC

conductor selected by the firm are not superior, as lines with AAAC

conductors will have higher losses as explained under Pt. 6(A) above.

Accordingly, the developer shall not be allowed to change the original

contents of RFP documents such as type of conductor which has been

clearly mentioned in 765kV line survey report as ACSR BERSIMIS

conductor and also with each line under schedule-2 “Project

description and scope of work”. As per provision of RFP & TSA,

choice of conductor is not left on Developer.

Further, the company did not point out to any errors of survey report or

to their intension of using equivalent AAAC conductors in place of

MOOSE & BERSIMIS conductors till the award of PPP Package-1 on

05.07.2011. Even SPA and TSA have been signed by them with

ACSR conductor in transmission lines.

The role of the company as developer is restricted to the

scope of work without putting LTTC’s to any commercial disadvantage.

M/s SEUPPTCL can create better system than envisaged in RFP or

TSA but not the inferior system having more transmission losses.

13. Same as at pt. 6, 11 & 12.

14. The contention of M/s SEUPPTCL that AAAC conductor is most

suitable and advance technology presently available is disputed due to

various reasons given in above paras. Further, it is relevant to mention

that IS for AAAC conductor was formulated in the year 1953 even than

this conductor has not found use on extra high voltage lines at 765kV

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& 400kV so far in India as already stated under pt.3 above, the use of

AAAC conductors is not as per bidding documents. M/s SEUPPTCL is

insisting on use of AAAC conductors because the same would result in

huge savings for them. The same is however not acceptable as it is in

deviation to RFP documents and would result in additional financial

burden on LTTC’s du to higher losses in the transmission lines.

15. No comments.

In this context it is also relevant to mention that M/s Isolux vide their

letter no. ICI/UPPTCL (BOOT)/2011-12/3228 dated 19.07.2011 after

issuance of LOI on 05.07.2011 for the first time informed UPPTCL

regarding its intension to use AAAC conductors and requested for

approval of parameters for AAAC MOOSE & BERSIMIS equivalent

conductors. UPPTCL, however vide its letter no. 1938 dated

30.08.2011 advised them to use ACSR MOOSE &BERSIMIS

conductors for constructions of 400/765kV transmission line as per

RFP documents and to submit the technical parameters of ACSR

MOOSE & BERSIMIS conductors for approval.

Thereafter M/s SEUPPTCL repeatedly requested for approval of

parameter for AAAC conductor vide its letter dt. 22.09.2011,

23.11.2011 & 29.12.2012. However, each time UPPTCL (letter no.

2242 dated 11.11.2011, 2316 dated 08.12.2011 & dated 03.01.2012)

advised them to use ACSR MOOSE & BERSIMIS conductors only for

construction of transmission lines in accordance with RFP documents

(copy of letters enclose).

Subsequently, M/s SEUPPTCL requested the Hon’ble Commission

vide letter dated 24.04.2012 to approve the use of AAAC conductors

for construction of transmission lines. The Ho’ble Commission denied

the same vide its order dated 18.05.2012 and 11.06.2012 considering

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it to be deviation from RFP documents. In view of above orders of the

Hon’ble Commission, UPPTCL again requested M/s SEUPPTCL to

confirm the use ACSR conductors vide its letter dated 25.06.2012

&28.06.2012. In response to these letters, M/s SEUPPTCL vide letter

no. SEUPPTCL/UPPTCL/2012-13/96 dated 02.07.2012 informed that

they are proceeding with design of towers with AAAC conductor. From

the above it is clear that despite repeated denial to allow use of AAAC

conductors by the UPPTCL and the Hon’ble Commission, SEUPPTCL

unilaterally decided to proceed with the design of towers for AAAC

conductors.

The Commission may also note that M/s WUPPTCL had also filed

petition before the Hon’ble Commission for allowing use AAAC

conductors for construction of transmission lines. However, in

accordance with the order of the Hon’ble Commission dated

19.03.2012, they have now decided to use ACSR MOOSE &

BERSIMIS conductors only for construction of 400kV & 765kV

transmission lines.

Due to above unilateral action of SEUPPTCL, UPPTCL issued a notice

to M/s SEUPPTCL on dated 09.07.2012 to confirm use of ACSR

MOOSE & BERSIMIS conductors for construction of 400 & 765kV

transmission lines. Hon’ble Commission is requested to settle the

issue at an early date as the decision of Commission for use of ACSR

conductor for construction of transmission lines is not being complied

by M/s SEUPPTCL.

Sd./- A.K. Singh

Director (Operation)

These two letters are very comprehensive in their subject of discussion.

The contents and issue raised in the other letters have been incorporated

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and discussed /replied comprehensively by both the parties in the above

reproduced two letters. SEUPPTCL vide its letter dated 18.07.2012 is

justifying the use of AAAC and UPPTCL vide its letter dated 25.07.2012 is

denying for use in the construction of transmission lines.

The Commission expressed its displeasure as the directions of the

Commission contained in its order dated 18-05-12 and subsequent letter

dated 11-06-12, regarding the use of conductor in Package-1, were not

complied. Therefore the Commission asked both the parties to explain the

issue in view of the provisions of bidding documents.

Sri Chaudhry of UPPTCL submitted that the bid documents and TSA specify

the use of Moose & Bersimis conductors for the construction of 400kv &

765kv lines respectively which stand for ACSR conductors only. On the other

hand, SEUPPTCL has been seeking permission to use AAAC conductors

which has been turned down by UPPTCL and subsequently by the

Commission as well vide its order dated 18-05-12 and letter dated 11-06-12.

When the Commission asked about the conditions on which the bids have

been finalized, Sri Chaudhry replied that the bids were finalized on Moose &

Bersimis conductors. Under the ‘scope of work’ in the bidding documents &

TSA, every transmission line is specified either with Moose or Bersimis

conductor, therefore use of Moose or Bersimis conductor is already under

the scope of work of the developer and we need to interpret whether Moose

& Bersimis are ACSR conductors or it can be the equivalent conductors like

AAAC, AL49, AL59 also. He further explained that Moose and Bersimis

conductors are defined only in British Standards (BS 215, Part-2) and

Canadian Standards respectively and not defined in any Indian Standards.

The bidding documents (RFQ, RFP) and the TSA mention about Moose &

Bersimis conductors and that stand for ACSR conductors only as indicated in

the survey report as well. AAAC, proposed by SEUPPTCL, is the conductor,

“Equivalent” to ACSR Moose or Bersimis conductors but the “Equivalent”

conductors are not mentioned in the bidding documents.

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SEUPPTCL explained that the bidding documents clearly state that the

developer should develop the system as per Indian Standards and if Indian

Standards are not available then system shall be developed as per

International Standards subject to the approval of Central Electricity Authority

(CEA). In the present context, the developer is pursuing to use AAAC as per

Indian Standards without asking for any deviation from the bidding

documents, so the issue arises is whether the use of AAAC can be permitted

in terms of the bid documents or not. SEUPPTCL further submitted that

Moose & Bersimis are the generic names only and are not specified in any

Indian or International Standards.

UPPTCL admitted that it is stated in the bidding documents that Indian

Standards are to be followed by the developer, but it applies when no

definite specification is assigned to any equipment or component under the

scope of work. It cannot be applied where some specific mention has been

made to the item in the scope of work in the bidding documents (RFQ/RFP)

and TSA. Sri Chaudhry further submitted that when it is said that if line is to

be constructed and no specific conductor is mentioned then we need to

interpret ‘which conductor’ shall be used. But when we say Moose or

Bersimis conductor then we do not require any further interpretation because

they are only ACSR conductor. Although, conductors with dimensions similar

to Moose conductors are mentioned in Indian Standard (IS) but IS does not

assign the name ‘Moose’ or ‘Bersimis’ to any conductor. Sri Chaudhry

categorically said that since ‘Moose’ and ‘Bersimis’ conductors are explicitly

mentioned in the bidding documents so it is implied that the developer has to

use ACSR conductors only as per British and Canadian Standards.

SEUPPTCL interrupted the discussion and submitted that with the consent of

the Commission a Committee has been constituted by the Government to

resolve the issue of the conductor and requested the Commission to leave

the discussion as of now till the issue gets finalized by the committee,

however, other matters like tariff adoption and grant of license may be taken

up without linking them to the conductor issue.

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The Commission denied their request and asked what is mentioned in the

bid document. The provisions of clause 1.5 of RFP have been read before

the Commission as hereunder:-

“1.5 The BPC has initiated development of the Project and shall be

responsible for the tasks in this regard as specified hereunder:

a) Provide to the Bidders a Survey Report for the 765kV line which has

already been provided at the RFQ stage. The Survey Report will contain

information regarding the transmission line, i.e. voltage level, line

configuration (i.e., S/C or D/C), indicative route alignment, conductor type,

conductor configuration and type of terrain likely to be encountered.

However, Survey for all other lines will be the responsibility of the

Bidders.”

The definition of ‘Survey Report’ as per RFP document was also read as

below:-

“Survey Report” shall mean the report containing initial information

regarding the Project and other details provided as per the provisions of

Clause 1.5 (a) of RFP”.

In view of above, UPPTCL again submitted that the survey report which is

the part of the bidding documents mentions about ACSR conductors only

whereas AAAC is not mentioned in any part of the bidding documents.

SEUPPTCL resisting the argument put forth by UPPTCL and relied its claim

on the disclaimer mentioned just below this clause in RFP which says “that

neither the BPC, its authorized representative, any of the Long Term

Transmission Customer(s), nor their Directors, Employees or

Advisors/Consultants make any representation or warranty, express or

implied, or accept any responsibility or liability, whatsoever, in respect of any

statements or omissions made in the Survey Report, or the accuracy,

completeness or reliability of information contained therein, and shall incur

no liability under any law, statute, rules or regulations as to the accuracy,

reliability or completeness of such Survey Report, even if any loss or

damage is caused to the Bidders by any act or omission on their part.”.

UPPTCL countered that it is a general disclaimer to safeguard the interest of

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both the parties because of any inadvertent error. It cannot be interpreted to

mean that the developer has the flexibility to change the type of conduct0r.

Moreover, benchmarking cost of the project was based on ACSR conductor

and any change in the conductor specification will change the financial

scenario of the project.

SEUPPTCL submitted that the type of conductor used in the project does

not affect the total tariff as the quoted tariff under the competitive bidding

does not depend upon the interpretation of bid document and therefore the

issue of conductor should not be linked with adoption of tariff under section

63 of the Act.

Having heard the arguments of both the parties and in the light of the

various facts brought to the notice of the commission by UPPTCL &

SEUPPTCL, the Commission is of the opinion that it is not appropriate at this

stage to determine the technical implications of using AAAC or ACSR

conductors and hence decided to restrict its observation to see which

conductor/conductors is/are permitted in accordance with the bidding

documents, irrespective of being superior or inferior technically.

The Commission observed that during the hearing both the parties agree

on this fact that under the scope of work in the bidding document & TSA, the

word ‘Moose’ or ‘Bersimis’ is specifically associated with each transmission

line. Both the parties also agree that the Moose & Bersimis conductors have

not been specified in the Indian Standards. The argument of UPPTCL that as

per British & Canadian Standards, Moose & Bersimis conductors are ACSR

conductors only has also not been opposed by SEUPPTCL. The

Commission looked into the papers, submitted by UPPTCL during the

hearing, regarding British & Canadian Standards. Regarding the plea of

SEUPPTCL that clause 1.3 of RFP restricts the developer to follow Indian

Standards & Codes only, the Commission went through the bidding

documents and is of the view that as per bidding documents Indian standard

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is to be followed in execution of project but if some specific mention has

been made to a certain item in the project then only prescribed specification

shall be used whether it exists in Indian standard or not. Since the conductor

type to be used in the transmission line has been associated with Bersimis or

moose under the scope of work in the bid document, therefore, the

Commission decides that only Bersimis or moose conductor (which stands

for ACSR conductor) shall be used in the construction of line. One more

important reason in support of above decision is this that benchmark price of

the project was worked out by the UPPTCL on BERSIMIS and MOOSE

conductors only.

The Commission was unable to understand SEUPPTCL’s view that on the

consent of the Commission, some committee has been set up to examine

the conductor issue. The Commission clarifies its stand that it never

recommended anybody to re-examine the conductor issue. SEUPPTCL is

probably referring to letter dated 20.7.2012 & 27.7.2012 of the Commission.

These letters state that the technical issues related with the execution of the

project may be examined by the UPPTCL. To draw the inference that it

relates to examine the issue of conductor in construction of line is not

correct. In this regard the Commission reaffirms its view that after the

completion of the bidding process any change related with the specification

of the project can neither be re-examined nor amended. Moreover, any post

bid change in the specification part affecting the financial part of the project

will amount to rebid.

In view of above deliberations, the Commission finds no substantial

reason to deviate from its decision in its interim order dated 18.5.2012 and

subsequent letter dated 11.06.12 in the same petition regarding the use of

conductor and therefore, Commission directs SEUPPTCL to use BERSIMIS

and MOOSE Conductors only for construction of transmission lines under

the project and submit its acceptance in this regard to UPPTCL within two

weeks from the date of this order under an intimation to the Commission.

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c) Clause 19.2.3 of TSA

Clause 19.2.3 refers to the technical criteria to be fulfilled by the new owner /

consortium in case of any change in the ownership of SEUPPTCL. As per

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.”

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

COD+2 & COD+5. The Commission referred to the review petition 690/2010

filed by UPPTCL under clause 19.2.3 of TSA, 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 SEUPPTCL under clause 19.2.3 of T S A.

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 SEUPPTCL 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

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up equity share capital of SEUPPTCL shall not be less than 26% up to a

period of 5 years after COD of the project then the selected bidder shall be

the part of SEUPPTCL up to the five years after COD of the Project.

Therefore any exit of the selected bidder from SEUPPTCL 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

SEUPPTCL may arise only after (COD+5) years. In light of above facts, the

Commission asked UPPTCL to clarify the issue.

Sri Chaudhry from UPPTCL explained that in accordance with the

provisions 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) up to

(COD+2) years and (b) after (COD+5) years. It means the ownership cannot

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

SEUPPTCL explained that the TSA has been signed was approved by the

Commission vide its order dated 15.9.2010 and when there is no dispute

between the concerned parties - UPPTCL & SEUPPTCL over this clause,

why this issue is being taken up by the Commission again. SEUPPTCL

requested that if at all there is some ambiguity, it 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

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Commission after the signing of TSA documents and then only the

Commission observed some inconsistency in the clause. SEUPPTCL

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

required to be raised again.

The Commission was not convinced with the arguments of SEUPPTCL

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

If UPPTCL observes any ambiguity in the clause, they should also submit

their proposal for the amendment of the clause along with the filing of their

reply.

d) 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.

It has been observed that only the originally quoted transmission

charges were attached by BPC under TSA schedule-10, whereas the LOI

dated 05-07-11 indicated that some negotiation with the L1 bidder (Isolux

Corsan) also took place during the bidding process and thereafter the bidder

submitted the revised transmission charges of 35 years corresponding to the

levelized tariff of Rs 870Cr/year. The revised transmission charges quoted

by the L1 Bidder on the basis of which LOI has been issued by BPC, 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 should have also been made the part of TSA schedule-10 (financial

bid). UPPTCL agreed to make the revised transmission charges as part of

TSA Schedule-10.

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The Commission directed UPPTCL to make the revised transmission

charges of the Selected Bidder along with all the relevant correspondences

in this regard, as part of TSA Schedule-10 and get the amended part of TSA

signed by all the concerned parties within two weeks from the date of this

order, with a copy to the Commission.

The Commission also inquired how the non-financial bid had been

evaluated as most of the documents attached with TSA Schedule-10 under

non-financial bid are in foreign language. Both the parties, UPPTCL &

SEUPPTCL confirmed that the English version of all such documents has

also been made the part of the TSA Schedule-10.

e) Signing of Share Purchase Agreement (SPA)

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

an agreement amongst UPPCL, SEUPPTCL and the Successful Bidder for

the purchase of 100% shareholding of SEUPPTCL, for the Acquisition Price,

by the Successful Bidder. Further, as per LOI dated 05-07-12 issued by

UPPTCL, the Successful Bidder in the Project was M/s Isolux Corsan

CONCESIONES SA. Therefore, the Commission is of the view that SPA was

required to be signed only by the three parties - UPPCL, SEUPPTCL and

M/s Isolux Corsan CONCESIONES SA., whereas it has been observed that

SPA was signed by the fourth party - Mainpuri Power Transmission Pvt. Ltd

also. The Commission also observed that SEUPPTCL in its letter dated 01-

06-12 addressed to Registrar of Companies stated that Mainpuri Power

Transmission Private Limited has acquired 100% equity stake of SEUPPTCL

from UPPTCL in accordance with SPA dated 16-12-11.

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

inquired about the role of Mainpuri Power Transmission to sign SPA. Both

UPPTCL and SEUPPTCL were unable to reply satisfactorily.

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The Commission considered it as a deviation from the approved SPA

document and directed UPPTCL & SEUPPTCL to file their replies under an

affidavit within two weeks from the date of this order.

The Commission also directed SEUPPTCL to submit the latest share holding

pattern and the Board of Directors of SEUPPTCL, Isolux Corsan

CONCESIONES SA and Mainpuri Power Transmission Pvt. Ltd along with

the Board resolution of Isolux Corsan CONCESIONES SA for authorization

to sign Share Purchase Agreement (SPA), as already directed vide its order

dated 18-05-12. All these documents will be submitted under an affidavit

within two weeks from the date of this order.

f) 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

only 240 days; whereas UPPTCL took more than 875 days to complete

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

UPPTCL replied that it was due to the delay in getting the approval of

various documents and procedures required at different levels of

decision making bodies.

(II) As per bidding documents, the SPA & TSA were required to be signed

within 15 days of issue of LOI. Since LOI was issued on 05-07-11 and

SPA & TSA were signed on 16-12-11 & 20-01-12 respectively, the

Commission inquired about the delay in signing of SPA (after a period of

five months) and TSA (after a period of 6 months). UPPTCL replied that

it was due to the time taken by the Successful Bidder (Isolux Corsan

Concesiones), in completing the requisite formalities.

(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

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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 690/2010 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

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 observed that all the concerned entities involved directly or

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

manner.

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g) 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 under an affidavit 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 levelized tariff was above the benchmark cost

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

directed UPPTCL to file its reply under an affidavit within two weeks from

the date of this order.

(III) The Commission asked SEUPPTCL to explain the electronic copies of

Forms 32, 18, 23 and 22B, submitted vide its letter dated 07-06-12.

SEUPPTCL explained each of these documents to the satisfaction of the

Commission.

h) 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

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

guidelines.

i) Provisions under Article 3.3.1 of TSA

The Commission inquired from UPPTCL regarding payment of additional

Contract Performance Guarantee of Rs 4.72 Cr per week from SEUPPTCL

to LTTCs in terms of Article 3.3.1 of TSA. UPPTCL replied that letters in this

regard have already been sent to SEUPPTCL but SEUPPTCL requested to

waive such additional CPG under the Article 11 (Force Majeure) of TSA.

The Commission directs both the parties to submit their replies under an

affidavit within two weeks from the date of this order

15. The Commission directs UPPTCL and SEUPPTCL to submit all the necessary

documents and replies, as directed by the Commission in various paras above,

under an affidavit, 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.

16. 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: 2nd April, 2013

Petition No 797 of 2012 BEFORE THE UTTAR PRADESH ...€¦ · Power, Govt. of India (hereinafter...

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Transcript of Petition No 797 of 2012 BEFORE THE UTTAR PRADESH ...€¦ · Power, Govt. of India (hereinafter...