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Centrally Owned Generating Projects Proposed not to be in Ambit of Competitive Bidding Procedure

<p style="margin-left:18.0pt; margin-right:0cm; text-align:justify">New amendment is tariff policy specifies that tariff for generation projects owned or controlled by Central Government shall no longer fall in ambit of competitive bidding procedures and tariff shall be determined on case to case basis.&nbsp;</p> <p style="margin-left:18.0pt; margin-right:0cm; text-align:justify">&nbsp;</p> <p style="margin-left:18.0pt; margin-right:0cm; text-align:justify"><span style="font-size:10.0pt">Electricity Act in 2003 was incorporated for conducive development of electricity industry, promoting competition therein, protecting interest of consumers and rationalization of electricity tariff, ensuring transparent policies. Such an amendment defies the objective of Electricity Act of transparent mechanism of Tariff determination, furthermore, Section 61 (c)-Tariff Regulation of Electricity Act also stipulates that Tariff determination shall be guided by factors which would encourage competition and transparency and this proposed amendment does not act in accordance with with same. Also, exclusion of Centrally owned generating companies from transparent competitive bidding process is likely to cause an adverse effect on competition in electricity industry and may harm interest of investors. This may not provide a levelling support for promotion of competition and privatization in to the Generation segment of Power Industry, thus ensuing a non-transparent market for participation.</span></p> <p style="margin-left:18.0pt; margin-right:0cm; text-align:justify"><span style="font-size:10pt">It is envisaged that, absence of competitive bidding procedures will result in realization of higher tariff which shall be a pass on to consumers, ultimately consumers shall be overburdened and grieved by inflated tariff through such amendments.</span></p>