Telangana’s 1,000 MW Solar Plant Tenders Raise Concerns Over Bias Toward Big Corporations Like Adani
While the initiative seems promising on paper, industry insiders point out that the tender conditions could potentially sideline smaller players in the sector.
Hyderabad: The Telangana government’s recent move to set up 1,000 MW of solar power capacity across the state has raised concerns about fairness in the tendering process.
Industry experts argue that the tender conditions are designed in a way that favors large corporations, such as Adani Group, leaving small and medium-sized enterprises (SMEs) at a disadvantage.
The tender for the solar plants, issued by the Telangana State Renewable Energy Development Corporation Limited (TGREDCO), is part of the Indira Mahila Shakti Scheme, which aims to empower women’s self-help groups (SHGs) by involving them in the installation and operation of 1 MW solar power plants. While the initiative seems promising on paper, industry insiders point out that the tender conditions could potentially sideline smaller players in the sector.
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Concerns Over Tender Conditions Favoring Large Corporations
The Indira Mahila Shakti Scheme invites tenders for the installation of 1,000 MW of solar plants across Telangana, with the intention to have these plants operated by women SHGs. However, the tender conditions have raised questions. Industry sources suggest that the requirements for ground-mounted solar plants with 11/33 kV connectivity essentially exclude vendors who have experience with smaller rooftop projects that use LT (400V) terminations. These vendors, who have been active in the rooftop solar sector (up to 1 MW), are now faced with specifications for large-scale ground-mounted projects that they are ill-equipped to handle.
Small players, especially those with experience only in rooftop solar plants, will find it difficult to meet the new requirements, which include a bank guarantee of 10% of the total project value and an annual turnover requirement of three times the installation cost. These conditions place a heavy financial burden on small and medium businesses, further skewing the tender process in favor of larger players like Adani Group, who can easily fulfill these criteria.
Financial and Operational Hurdles for Small Businesses
The tender’s conditions are seen as a major challenge for smaller companies and MSMEs in Telangana. For example, the bank guarantee requirement of 10% has been criticized as excessive, with some small businesses proposing a reduction to 8% in a pre-bid meeting. However, their concerns were not addressed, and it is feared that the high guarantee may deter smaller companies from participating in the tender process.
Additionally, the stipulation that a company must have an annual turnover three times the installation cost further restricts small businesses. If the cost of installing a 1 MW solar plant is around Rs. 3 crores to Rs. 3.5 crore, the company must demonstrate a turnover of Rs. 9 crores to be eligible for a tender. This financial threshold leaves local vendors struggling to compete with the large corporations that can easily meet such criteria.
Also Read | Adani Group on solid financial footing despite US-related developments: Bernstein
The Impact on Local Businesses and Employment Opportunities
Local businesses in Telangana, particularly those focusing on solar energy solutions, have voiced their concerns over the lack of a robust policy for solar plants exceeding 1 MW. According to B Ashok Kumar Goud, President of the Telangana Solar Energy Association (TSEA), the absence of clear guidelines for large-scale solar projects has created a gap that benefits big companies over smaller, local players. He stated, “The current tender conditions are not just challenging for local vendors, they are also detrimental to the spirit of local economic growth.”
The gap in policy creates a situation where small players, who might otherwise be well-equipped to work on smaller-scale projects, are unable to scale up due to the financial and operational barriers introduced in the new tender requirements. This restricts job creation and stalls economic development in the region, where local businesses could have played a major role in driving forward the solar energy transition.
The Role of Big Corporations in the Tender Process
The presence of large players like Adani Group at the pre-bid meeting is seen as a sign that they are already positioning themselves to dominate the bidding process. As industry sources point out, the financial requirements and technical specifications of the tender make it exceedingly difficult for smaller companies to compete. As a result, companies like Adani, with the necessary financial muscle and experience in large-scale projects, are likely to secure the majority of the tenders.
This raises questions about whether the government’s efforts to empower women’s SHGs under the Indira Mahila Shakti Scheme will be overshadowed by the dominance of large corporations. Many fear that the scheme’s success could be compromised if local businesses, especially those in the MSME sector, are unable to participate effectively due to the restrictive conditions.
Calls for a Revision of Tender Conditions
Industry leaders and local vendors are urging the Telangana government to reconsider and revise the tender conditions to promote fairness and encourage the participation of small businesses. Many have suggested reducing the bank guarantee requirement to 8% and lowering the turnover thresholds to ensure a level playing field for all participants.
According to experts, providing a fair opportunity for local businesses will not only foster economic growth but also contribute to job creation and support the women’s empowerment goals of the Indira Mahila Shakti Scheme.
Conclusion: A Call for Fairness and Local Empowerment
The concerns raised by industry players about the 1,000 MW solar power plant tenders in Telangana highlight significant issues that need to be addressed for the state’s solar energy ambitions to succeed. The government must ensure that tender conditions are fair and inclusive, allowing both large corporations and small businesses to compete on an equal footing. By doing so, Telangana can foster local economic growth, create job opportunities, and empower its people through sustainable energy solutions.
As the December 10 deadline for submitting tenders approaches, all eyes are on the Telangana government to take action and address these concerns for a more equitable and sustainable future in solar energy.
