Power Market scenario

Key Driver Liberalization

What does it mean for Utility Bottom line ?

Shift from COST + approach to Tariff

based approach

High Cost of funds- timely Completion

& within budget AN ABSOLUTE MUST

Guaranteed performance parameters

Least Life Cycle cost
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 Power Project contracting Models
Multiple package route
Advantages
• Least cost of Purchase
•Total control over individual
equipment specification
• Total Control over sub vendor
selection
Single EPC Route
Disadvantages
• Requires large number experienced staff for engineering ,
execution & project management for more than 40 packages
• High project schedule risk
 Micro level Project Monitoring required -Sub system
delay could cause project over runs
 Large interface requirements
 Large ordering cycle time for > 40 packages
• Performance guarantees of the complete system difficult to
prove
• High Project cost risk: Escalation factors of individual
packages
• Engineering changes during detailed execution will result
in Cost & Time overrun 2
 Power Project contracting Models
Advantages
• Single point responsibility for the
complete project in terms of cost &
schedules.
• Guarantees provided for overall
performance
• Least risk envisaged with heavy
penalties as strong deterrent.
Single EPC Route
Disadvantages
• Major EPC contracts in India & suffer from following
inherent disadvantages
 Except the main BTG other packages are bought
outs and hence
 Escalated cost to end
Marginal control over schedule
Long Procurement cycle
 Least flexibility to Engineering change &
Vendor selection.
NET RESULT: COST & SCHEDULE OVERRUNS
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 Power Project Contracting Models

Multiple Package Route Single EPC Route

Twin Package Route

( Emerging Model)
Comprising of :
 Main Plant ( Power Island )
 Balance of Plant (BOP)
Combines advantages of Both Routes
- Flexibility & Total Control
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 Key Advantages of TURNKEY BOP EPC- Contracting
Single Point Responsibility for Design,Engineering, supply,erection &
commissioning of a number of BOP packages
 Least Interfacing related issues between sub systems thereby
faster commissioning
 Shorter ordering cycle time of sub systems
 Flexibility during engineering for design changes without affecting
overall schedule
 Flexibility in Vendor selection
Simpler co-ordination requirement – One point contact. Minimum
staffing required from end user organisation

Enforceable Guaranteed Plant performance - Stiff Penalties which

are levied as % of total package cost is a big deterrent

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 Key Advantages of TURNKEY BOP EPC- Contracting
LEAST Risks to customer
Minimum Finance risk
Ordering on firm price & LCB basis
 Firm cash flows
Minimal schedule risk – Stiff Penalties which are levied as % of total
package cost is a big deterrent

SUMMARY:
1) Guaranteed Quality, Performance &
Choice of vendors
2) Least Project schedule & Financial
overruns

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 Pitfalls to avoid on TURNKEY BOP EPC- Contracting

 Bidding to be through LCB instead of ICB route for following reasons

Bidding through LCB route -Reputed BOP- EPC contractors in India have
necessary experience in handling local contractual laws & procurement and
provide easier access during contract execution.
 Indian contractors are amenable to design changes, vendor selection
without going into protracted negotiation post award if necessary by
customer
 Stringent PQR conditions to eliminate entry of Fringe players.FOCUS ON
EXECUTION STRENGTH IN INDIA
 Clarity in scope & terminal points between BTG Vendor & BOP Vendor

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List of Projects In India adopting the route of BOP- EPC
Contracting
Ordered by EPC Contractor

S. No Projects Type Capacity

1. Parischa Thermal 2 x 210 MW

2. Panipat Thermal 2 x 250 MW

3. Aditya Cement Thermal 25 MW

4. DVB – Pragati CCPP 330 MW

5. Kuttalam CCPP 100 MW

6. Valathur CCPP 95 MW

7. Dholpur CCPP 330 MW

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List of Projects In India adopting the route of BOP-
EPC Contracting
Ordered / being implemented directly by End user

S. No Projects Type Capacity

1. Dholpur CCPP 330 MW
2. Giral 2 Thermal 125 MW
3. VTPS Thermal 500 MW
4. KTPP Thermal 500 MW
5. Chabbra Thermal 2 X 250 MW
6. Kota Thermal 1 X 195 MW
7. Suratgarh Thermal 1 X 250 MW
8. Khaperkheda Thermal 1 X 500 MW
9. Bhusawal Thermal 2 X 500 MW
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List of Projects In India adopting the route of BOP-
EPC Contracting
Ordered / being implemented directly by End user

S. No Projects Type Capacity

10. Chandrapur Thermal 2x500 MW
11. Malwa Thermal 2x600 MW
12. Marwa Thermal 2x500 MW
13. Satpura Thermal 2x250 MW
14. Korba Thermal 1 X 500 MW
15. Haldia Thermal 2 X 300 MW
16. Meenakshi Thermal 2 X 300 MW
17. PEL Power Thermal 2 X 500 MW
18. Abhijit Thermal 2 X 270 MW
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