This exclusive story takes a closer look at the bidding process of the Rajasthan HVDC project – the first ISTS-TBCB scheme involving HVDC infrastructure awarded to a private entity.
On January 20, 2025, Adani Energy Solutions Ltd (AESL) formally acquired “Rajasthan Part I Power Transmission Ltd” from bid process coordinator REC Power Development & Consultancy Ltd. This was the first HVDC-based ISTS-TBCB scheme to be awarded to a private sector entity.
Interestingly, Power Grid Corporation of India Ltd (PGCIL) had earlier emerged L1 for the same project and it was widely expected that it was only a matter of time before the project was awarded to PGCIL.
For reason then publicly unknown, the bidding process in which PGCIL emerged L1 was annulled and fresh bids were invited in which AESL emerged the final winner.
Here is a closer look at the turn of events, based on official information newly available.
In the initial round of bidding, three bidders – PGCIL, AESL and Sterlite Power (now Resonia) – submitted their bids, which were opened on May 29, 2024. Here PGCIL was L1 with a quote of Rs.37,000.00 million being the annual transmission charges (tariff). The L2 bid was Rs.48,850.20 million (32 per higher than L1) and the L3 bid, 54 per cent higher than the L1 bid, stood at Rs.57,000.29 million. AESL was L3 at this stage.
The e-reverse auction (e-RA) was held the following day, on May 30, 2024, with the L1 quote mentioned above as the ceiling for quoting the final offer.
No bids were received at the e-RA stage and PGCIL’s L1 bid of Rs.37,000.00 million (or Rs.3,700 crore) therefore emerged as the final winning bid. [With L2 and L3 bids substantially higher than the L1 bid, it is not surprising that the L2 and L3 bidders did not participate in the e-RA process, and as such, the e-RA never kicked off.]
The turn of events came on August 9, 2024 when the bid evaluation committee (BEC) met to discuss the acceptability of the L1 bid. The BEC recommended re-bidding of the scheme annulling the current bidding process. The reason: the BEC ruled that the discovered tariff (of Rs.37,000.00 million or Rs.3,700 crore) was 55.41 per cent higher than the tariff internally assessed. As such, the winning tariff was considered not aligned with the market prices. The BEC also took cognizance of the fact that no bids were submitted during the e-RA stage.
The re-bidding was initiated on August 17, 2024 and the initial price bids were opened on October 8, 2024. Interestingly, this time, four bidders participated with IndiGrid being the fourth, in addition to the three bidders involved in the previous bidding round.
As per the initial price bids submitted, AESL was L1 with a quote of Rs.35,570.00 million while PGCIL was L4 with Rs.40,820.00 million. That PGCIL upwardly revised its quote by 10.3 per cent from what it had quoted in the previous bidding process is intriguing but explained ahead.
Even in this bidding round, no bidder participated in the e-RA and L1 bidder AESL with a quote of Rs.35,570.00 million was therefore potentially the winning bidder. Once again, the BEC deliberated on this quote. Since this tariff was lower than the lowest tariff discovered in the previous bidding process (Rs.37,000.00 million), AESL was declared winner.
The letter of intent was issued to AESL on December 3, 2024 and the project SPV “Rajasthan Part I Power Transmission Ltd” was formally transferred by RECPDCL to AESL, on January 20, 2025.
One possible reason why PGCIL upwardly revised its quote from Rs.37,000.00 million to Rs.40,820.00 million was that RECPDCL upwardly revised the envisaged cost of the ISTS-TBCB scheme from Rs.17,088.98 crore to Rs.22,676.31 crore. Based on the revised cost, the BEC estimated the “fair” tariff to be Rs.32,048.29 million. Though AESL’s wining quote was around 11 per cent higher, the BEC found it acceptable as it was still lower than the lowest bid discovered in the previous bidding round.
For detailed background news, please refer to the following T&D India stories
- August 2024: PGCIL emerges L1 for Rajasthan HVDC scheme
- August 2024: Tendering annulled for Rajasthan HVDC project
- December 2024: Adani Energy wins HVDC scheme in Rajasthan
- January 2025: Adani Energy formally acquires India’s first HVDC awarded to private sector under TBCB
Featured photograph for representation only
