Procurement Plan. Name of Borrower Madhya Pradesh Power Sector Investment Program Project 1

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1 Procurement Plan Project Information Country India Name of Borrower INDIA Project Name Madhya Pradesh Power Sector Investment Program Project 1 Loan Reference 2323-IND Date of Effectiveness 14 May 2007 Amount $106 million Executing Agency Madhya Pradesh Power Transmission Company Limited (TRANSCO) Approval date of Original Procurement Plan April 2007 Date of Current Procurement Plan 10 January 2011 Publication for local advertisement I Quarter 2011 Procurement Threshold, Goods & Related Services, Works and Supply and Install Procurement Method ICB Goods ICB Design, Supply and Install To be used for contract value > $1.0 million > $1.0 million Procurement Threshold, Consulting Services Procurement Method No consultants will be required under the Project Alternative Methods None To be used for contract value

2 List of Contract Packages in Excess of $100,000, Goods, Works and Consulting Services Loan 2323-IND Ref Contract Description Estimated Cost Procurement Expected Date of Prior ($ Million) Method Advertisement Review Y/N 1 Power Transformers 4.7 ICB I Quarter, 2011 Y Comment 132/33 kilo volt (kv) 40 mega voltampere (MVA) 2. Distance Protection Relays and Differential Relays 3 Lightning Arrestors (LAs) 220 kv (LAs), 132 kv LAs and 33 kv LAs.86 ICB I Quarter, 2011 Y.57 ICB I Quarter, 2011 Y

3 C. National Competitive Bidding 1. Procurement of Goods a. General 7. National competitive bidding for the procurement of goods and related services shall conform to the provisions for "Advertised Tender Enquiry" as prescribed in the General Financial Rules, 2005 issued in July 2005 by the Ministry of Finance (MOF) 1 and elaborated in the Manual on Policies and Procedures for the Purchase of Goods issued by the MOF in August 2006, with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement Guidelines. b. Registration and Other Pre-Bid Requirements (i) (ii) (iii) Bidding shall not be restricted to Registered Suppliers of the Director-General Supplies and Disposals (DGS&D) of the Ministry of Supply and Rehabilitation, and such registration shall not be a condition for the submission of bids in the bidding process. Where registration is required prior to award of contract, bidders: (i) shall be allowed a reasonable time to complete the DGS&D registration process; and (ii) shall not be denied registration for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification. Foreign suppliers and contractors from ADB member countries shall be allowed to bid, without registration, licensing, and other government authorizations. However, in case these foreign suppliers and contractors are declared winning bidders, the requirements may be completed after award and before signing of contract, without unreasonable costs or additional requirements. c. Advertising 8. Bidding of NCB contracts estimated at $500,000 or more for goods and related services shall be advertised on ADB s website via the posting of the Procurement Plan. d. Contract Budget 9. The estimated budget for the contract may be published, but it shall not be stated or implied that bid prices shall not exceed the budget, or that bid evaluation will in any way take into account the budget. The budgetary allocation, ceiling price, or similar estimates of contract value shall not be used to reject bids without prior concurrence of ADB. e. Bidding Documents 1 Reference: Nabhi s Compilation of General Financial Rules, 2005, Nabhi Publication, 2006

4 10. Procuring entities shall use standard bidding documents acceptable to ADB based ideally on the standard bidding documents issued by ADB. f. Two-Bid System 11. The Two-Bid System as applied for the procurement of goods shall be considered the equivalent of ADB s Single-Stage, Two-Envelope bidding procedure. g. Bidding Period 12. Procuring entities shall allow for a minimum of four weeks for submission of bids. h. Bid Opening 13. No bid shall be rejected at bid opening, except late bids. i. Bid Security 14. Where required, bid security shall be in the form of a bank guarantee from a reputable bank and should normally be about two percent of the estimated value of contract to be procured. The bid security shall be required to remain valid for a period of not more than 30 days beyond the final bid validity period. 15. When required for the specific procurement, all bidders, including those that are registered with the Central Procurement Organization, National Small Industries Corporation, or relevant Ministry or Department, are required to provide bid security with their bids. j. Preferences 16. No preference of any kind shall be given to domestic bidders or for domestically manufactured goods such as those manufactured by Small Scale Industrial Units, other government corporations, and private companies operating in India. k. Price Negotiations 17. Price negotiation shall be allowed only where the price offered by the lowest evaluated and substantially responsive bidder substantially exceeds costs estimates. Approval of ADB is required prior to any negotiation of prices. l. Member Country Restriction 18. Bidders must be nationals of member countries of ADB, and offered goods and related services must be produced in and supplied from member countries of ADB. m. Participation by Government-Owned Enterprises 19. Government-owned enterprises in India shall be eligible to bid only if they can

5 establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Executing Agency or the Implementing Agency. 2. Procurement of Works a. General 20. National competitive bidding for the procurement of works shall conform to the provisions for "Item Rate Tenders" as prescribed in the Central Public Works Department (CPWD) Works Manual, 2003 as updated to September and the General Financial Rules, 2005 issued in July 2005 and elaborated in the Manual on Policies and Procedures for Procurement of Works, August 2006, both issued by the MOF, with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement Guidelines. (i) (ii) (iii) b. Preferences No preference of any kind shall be given to domestic private contractors, and domestic contractor groups associated with the Registered Labour Cooperative Societies and Unemployed Engineer Societies, and contractors of communities of Scheduled Castes and Scheduled Tribes. No purchase preference shall be given to products and services of Public Sector Enterprises. Foreign suppliers and contractors from ADB member countries shall be allowed to bid, without registration, licensing, and other government authorizations, leaving compliance with these requirements for after award and before signing of contract, without unreasonable costs or additional requirements. c. Prequalification 21. Post qualification shall be used unless prequalification is explicitly provided for in the loan/grant/financing agreement/procurement plan. When used for large or complex works contracts, i.e. turnkey, design and build, or management contracts; or custom-designed equipment, industrial plants, and specialized services, prequalification evaluation shall not include the evaluation of equipment and personnel. This assessment shall be undertaken at the bid evaluation stage. Irrespective of the procedure applied (whether prequalification or postqualification), no domestic or foreign contractor shall be precluded from participation. d. Joint Ventures 22. Joint ventures shall be eligible to participate and submit bids. Joint venture partners shall be jointly and severally liable. e. Bidding Documents 23. Procuring entities shall use standard bidding documents acceptable to ADB. 2 Reference: J.M. Jaina & Brothers, CPWD Works Manual (Updated and Corrected), September, 2006

6 24. No restrictions in the sale of bidding documents shall be imposed such as: (i) sale only to registered contractors; and (ii) limiting sale only up to four (4) days before the opening of bids. f. Advertising 25. Bidding of NCB contracts estimated at $1,000,000 or more for works shall be advertised via the posting of the Procurement Plan. g. Contract Budget 26. The estimated budget for the contract may be published, but it shall not be stated or implied that bid prices shall not exceed the budget, or that bid evaluation will in any way take into account the budget. The budgetary allocation, ceiling price, or similar estimates of contract value shall not be used to reject bids without prior concurrence of ADB. h. Schedule of Rates and Estimates 27. Scheduled rates or the system of unified schedule of rates may be used to establish the employer s estimate but bids should not be rejected solely on the basis of a comparison with the scheduled rates. Rejection of bids on the basis of rates substantially higher than estimates shall be subject to prior approval of ADB. i. Two-Envelope Bidding and Two-Bid System 28. Bids shall be submitted, at the most, in two envelopes. The first envelope shall contain the bid security, legal documents, technical proposal and qualification documents, which shall be evaluated together. The second envelope shall contain the schedule of prices. The Two- Bid System as applied in the procurement of works shall be considered equivalent to ADB s Two-Stage bidding procedure. j. Bidding Period 29. Procuring entities shall allow for a minimum of four weeks for submission of bids. k. Bid Opening 30. No bid shall be rejected at bid opening, except late bids. l. Validity of Bids 31. Bidders shall be required to submit bids valid for a period specified in the bidding documents which shall be sufficient to enable procuring entities to complete the comparison and evaluation of bids, and obtain al the necessary approvals, including that of ADB if prior review is required, so that the contract can be awarded within that period. m. Bid Security, Performance Security and Retention

7 (i) (ii) (iii) Where required, bid security (or earnest money ) shall be in the form of a bank guarantee from a reputable bank and should normally be about two percent of the estimated value of contract to be procured. The bid security shall be required to remain valid for a period of not more than 30 days beyond the final bid validity period. The terms and conditions of bid security (earnest money), retention money (or security deposit) and performance security (or performance guarantee) shall be clearly specified in the forms provided and/or conditions of contract in terms of periods of validity and grounds for forfeiture, or release of the bank guarantees, or refund of the cash security deposits. Bid security and retention money shall not be accepted to form part of performance security because their purposes and grounds for forfeiture are different and applied separately. n. Award Criteria 32. A contract shall be awarded to the bidder that submits the lowest evaluated substantially responsive bid, and who meets the qualifying requirements stipulated in the bid document. No other factor (i.e., offered schedule of rates based on a percentage above the market rate, excess of offered unit prices as compared to the schedule of rates) shall be considered in the determination of the lowest evaluated substantially responsive bid. o. Price Negotiations 33. Price negotiation shall be allowed only where the price offered by the lowest evaluated and substantially responsive bidder substantially exceeds cost estimates. Approval of ADB is required prior to any negotiation of prices. p. Mobilization Advance 34. Mobilization advance, if so provided in the conditions of contract, shall be granted as an interest-free loan. q. Member Country Restriction 35. Bidders must be nationals of member countries of ADB, and offered works and services must be from member countries of ADB. Materials and equipment to be supplied for the works, must be produced and supplied from member countries of ADB. r. Participation by Government-Owned Enterprises 36. Government-owned enterprises in India shall be allowed to participate in bids only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Executing Agency or Implementing Agency.

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