Please refer Ministry of Power office memorandum 42/2/2020-RE (E-252790) dated 10th June 2020 whereby a high level steering committee was constituted under Chairmanship of Secretary (Power) Govt. of India “to guide and steer the initiative of privatisation of power departments/ utilities in union territories”. The terms of reference included
i) To guide the administration of all UTs (except Delhi and Lakshadweep) in the privatisation process of electricity distribution.
ii) To periodically monitor the process of privatisation and ensure its timely completion.
The Ministry of Power OM stipulated at Sr. no. 4
“The privatisation initiative may be completed by January 2021”.
2. The Ministry of Power which had setup the steering committee on 10/06/2020 did not have the competitive bidding guidelines for privatisation of distribution, and in absence of such guidelines it was not possible to go ahead with tendering process or competitive bidding by which the privatisation of UTs could be achieved.
3. It was on 22/09/2020 that Govt. of India issued the draft of competitive bidding guidelines and uploaded this draft on the Ministry of Power website, inviting comments/ suggestions. Last date for submission of comments was 05/10/2020.
4. On the other hand section 63 of the Electricity Act 2003 stipulated as under.
“Section 63. (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”.
4.1 However, the competitive bidding guidelines as mentioned in section 63 of the Electricity Act 2003 were applicable for power stations and not for privatization of Distribution.
a) Case 1 where the bidding was in terms of power without specifying the station
b) Case 2 Station/ Location specific bidding.
4.2 The existing competitive bidding guidelines of Sec 63 were therefore not suitable of the process of competitive bidding to achieve privatisation of electricity distribution in union territories.
4.3 At the time of taking decision for privatization of distribution i.e. on 12/5/2020 or at the time of constitution high level steering committee on 10/6/2020 the Govt. of India authorities knew very well that competitive bidding guidelines for privatisation of distribution do not exist, and even then the deadline of January 2021 was fixed.
4.4 The privatisation process of UT Chandigarh as well as UT Dadra Nagar Haveli, Daman & Diu was taken up on the basis of some guidelines that are not in public domain, and are not the guidelines finalized/ approved by Govt. of India.
4.5 By contrast the guidelines mentioned in Section of 63 Electricity Act 2003 have the force of statute.
5. Due to the fact that the guidelines on the basis of which bidding was carried out for UT Chandigarh were not the “Standard bid documents”, there have been several anomalies and discrepancies that have cropped up in the bidding carried out for Chandigarh.
6. The guidelines adopted / finalized by Govt. of India for cases covered under section 63 contain several principles that would be useful in evaluating the analyzing the procedures actually adopted in case of UT Chandigarh.
7. All India Power Engineers Federation (AIPEF) is making its analysis on comparative basis and the guidelines of Govt. of India (U/s 63 of Electricity Act 2003) issued vide no. 23/11/2004-R&R (Vol.-ix) PT. B dated 22/7/2010. (Annex 1)
8. Summary of events.
a) The original bid notice was issued around 10/11/2020 which specified a pre-bid meeting of 01/12/2020 and last date of bid submission as 30/12/2020.
b) As a result of a stay order by Punjab and Haryana High Court the bidding process was stopped. Later, when stay was vacated the bidding process was resumed and revised date submission of bid was 07/02/2021.
c) Six bids were submitted and received on 08/02/2021 as against about 18 firms which were considered to be interested..
d) After submission of bids on 08/02/2021 bids were not opened but kept pending.
e) On or around 08/03/2021 the UT Chandigarh Administration carried out 4 amendments to RFP documents and issued corrigendum on website extending the last date of bids to 18th March and further specifying.
1. The existing bids which have already been received will be treated as valid, if no specific modification is made in writing by the bidders.
2. Only the new bidders if any will be charged the cost of RPF/ Participation Fee.
3. The other terms and conditions of the approved RPF shall remain the same.
4. Bidders are advised to visit
http://chdengineering.gov.in/pages/privatisation.html from time to time to keep themselves updated.
Copy of corrigendum and amendments are attached at Annexure- 2, 3.
9. The following points need to be examined.
i) How and why the bid date was extended, after one month of bid submission when 6 bids had been received on due date .
ii) When 6 bids had been received, where was the necessity for extending the date.
iii) Whether the date can be extended after the due date has passed and after 6 bids have been received.
iv) Issues related to submission of bid date
v) On what ground the 6 bids were considered inadequate, as the basis for extending the date.
vi) When financial parameters of RFP have been revised, which have direct financial implication, how there can be two RFPs i.e. one original RFP (on basis of which 6 bids were received) and second the revised RFP for new bidders to come in after 08th March revision.
vii) How competing bids can be compared when the RFP has been changed midway.
10. To examine these issues the comparison is done w.r.t. section 63 guidelines in respect of parameters and issues which are common in nature. Response will be made to guidelines dated 20/7/210 (section 63_ referred to as July 2010 guidelines
10.1 July 2010 guidelines
5.7 page 16/283 To ensure competitiveness, the minimum number of qualified bidders should be at least two other than any affiliate company or companies of the procurer. If the number of qualified bidders responding to the RFQ/RFP is less than two, and procurer still wants to continue with the bidding process, the same may be done with the consent of the Appropriate Commission.
Comments: When 2 bids are considered adequate and when 6 bids have been received, then there is no basis to extend date.
10.2 Para 5.19 page 18/283
5.19 In the single stage bid process, a minimum period of 75 days shall be allowed between the issuance of RFP documents and the last date of bid submission. The timetable for the bid process is indicated in Annexure-II. In normal circumstances, the bid process is likely to be completed in a period of 120 days.
The Procurer may give an extended timeframe than indicated in the Annexure-II. However, if the bidding process is likely to take more than 195 days, approval of the Appropriate Commission shall be obtained in accordance with clause 5.16.
Comments : Since the delay was due to a stay order, there is no basis to extend the tender date when 6 bids had been received..
10.3 Para 21/283
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Sl. No.
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Event |
Activities to be completed by the Bidder prior to submission of Bid |
Elapsed Time from Zero date
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1 |
Date of issue of RFP |
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2 |
Bid clarification, conferences etc. & revision of RFP |
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3 |
RFP Bid submission |
XXXX |
75 days |
Comments: As per time table given on page 21/283 the process of bid clarification, conferences and revision of RFP is to be completed 75 days before bid submission date. There is no scope to make amendments in RFP after bid submission.
10.4 Para 2.2.6 clarification and pre bid meeting, page 52/283
“2.2.6 Clarifications and Pre-bid Meeting
2.2.6.1 The Procurer / Authorized Representative will not enter into any correspondence with the Bidders, except to furnish clarifications on the RFP and RFP Documents, if necessary. The Bidders may seek clarifications or suggest amendments to RFP and RFP Documents in writing, through a letter or by fax (and also soft copy by e-mail) to reach the Procurer / Authorized Representative at the address, date and time mentioned in Clause 2.8. For any such clarifications or amendments, the Bidder should adhere to the Format 5.6 of the RFP. For the avoidance of any doubt, it is hereby clarified that there shall be no extension in the Bid Deadline on account of clarifications sought in accordance with this Clause 2.2.6”.
Comments: Pre-bid conference and clarifications are to be completed before submission of bids. There is no basis for revision of RFP after bid submission date is over.
Sincerely Yours
Shailendra Dubey
Chairman