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Madhya Pradesh revises the conditions for its rooftop solar tender

Madhya Pradesh government has reportedly revised the conditions for its rooftop solar tender.

When the Finance Ministry on July 30 notified a safeguard duty ranging from 15-25 per cent on solar cells and panel, the state was in the middle of a tender.

According to Business Standard the state government has amended Clause 3.29 of the RFP, dealing with tax and duties, through a corrigendum to the tender. The Madhya Pradesh government had floated a rooftop solar tender to put up 28 MWp of projects through RESCO model.

The report states that the amended clause specifies how changes in tax would be passed on in the tariff. This adjustment in tariff because of change in capital cost can be done till three months before the project’s scheduled commissioning specified in the power purchase agreement (PPA).

Manu Srivastava, principal secretary, renewable energy in the Madhya Pradesh government speaking to the publication said “The ‘Change of Law’ clause in contracts usually states the legal position, but is silent on how to implement it. Our RESCO tender provides absolute clarity on how the expected imposition of safeguard duty would translate into impact on tariff. This would give complete clarity to bidders, as also free the bid authorities of the challenge of deciding on a contentious issue post-bid.

The corrigendum to the tender says power producer would be entirely responsible for all taxes, duties, license fees, etc., however, “if any new change in tax/duty and cess is effected in the period after the financial bid submission deadline and any time during the period of agreement, the same will be passed on by the power producer to the procurer”. It specifies the evaluation method for this change.

Capital cost is taken as 80 per cent of the total project cost of which cost of solar cells is taken as 26 per cent in accordance with the benchmark set by the Union ministry of renewable energy.

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