No clarity on Lanco’s Rs120 crore bond for failed Sasan bid

No clarity on Lanco’s Rs120 crore bond for failed Sasan bid
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First Published: Thu, Jul 26 2007. 12 54 AM IST
Updated: Thu, Jul 26 2007. 12 54 AM IST
A day after the government disqualified Lanco Infratech Ltd and Globeleq Singapore Pte.’s winning bid for the 4,000MW ultra mega power project (UMPP) in Madhya Pradesh, it is still not clear whether Lanco would get back its Rs120 crore security bond.
“The minister has made it pretty clear that no one has been blacklisted. In such an event, we will have to return the bid-security bond to the company (Lanco Infratech). A decision to this effect will be taken shortly once the eGoM (empowered group of ministers) reconvenes,” said a senior executive of Power Finance Corp. (PFC), who did not wish to be identified. The ministers are scheduled to meet by 4 August. PFC is the agency managing the bidding of the power plant.
For the second day in a row, Lanco Infratech officials did not respond to repeated calls for comment. Though some analysts say that they believe the company will get its money back, the company’s shares fell 10.13%, or Rs23.70 a share, to Rs210.30 at close of trading on Wednesday on the Bombay Stock Exchange.
In a related development, NTPC Ltd officials privately reiterated their earlier stand of opposing any move to give the project to the runner-up, Reliance Energy Ltd, arguing that it will go against the guidelines laid down by the Central Vigilance Commission (CVC).
Reliance had quoted a tariff of Rs1.29 per unit compared with Lanco’s winning bid of Rs1.19 per unit. Lanco got disqualified over issues with its consortium.
“As Lanco has been disqualified, we want the bidding process to start afresh,” said a senior NTPC executive, who did not wish to be named. NTPC is making its case on the basis of a circular of CVC dated 24 August, 2000, which states “If L1 party (the company with the lowest bid) backs out, there should be retendering in a transparent and fair manner. The authority may, in such a situation, call for limited or short notice tender if so justified in the interest of work and take a decision on the basis of the lowest tender.”
Since Lanco didn’t back out, but was disqualified, it is unclear how the government will interpret the circular.
NTPC itself had quoted a tariff of Rs2 per unit.
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First Published: Thu, Jul 26 2007. 12 54 AM IST