Parekh panel likely to call for a rebid of Sasan project

Parekh panel likely to call for a rebid of Sasan project
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First Published: Tue, Apr 03 2007. 12 29 AM IST
Updated: Tue, Apr 03 2007. 12 29 AM IST
Lanco Infratech, lead promoter of the 4,000MW ultra mega power project in Sasan, Madhya Pradesh, is likely to be ejected from the project, according to a senior government official involved in the process who did not wish to be identified.
Rebids will be invited from the other nine pre-qualified bidders, added the official.
The bid evaluation committee, headed by HDFC Ltd chairman Deepak Parekh, will be meeting this week to pronounce its decision on the Rs18,000 crore project. Other members of the committee include Power Finance Corporation chairman and managing director V.K. Garg and Central Electricity Authority chairman Rakesh Nath.
The bid to develop the power project, to be set up in the Sidhi district of Madhya Pradesh, was won by a consortium comprising the Hyderabad-based Lanco and Globeleq Singapore Pte, a subsidiary of Houston-based Globeleq. However, Globeleq decided to sell some of its global assets, including the Singapore firm.
Lanco and Jindal Steel and Power Ltd—one of the losing bidders for the project—acquired Globeleq Singapore, but some of the other losing bidders protested, saying this acquisition changed the nature of the consortium. They asked for Lanco to be disqualified. With the board of Sasan Power Ltd unable to arrive at a decision, the Parekh panel was created to decide on the future course of action.
“The committee was earlier thinking on the same lines but could not take a decision as its term and tenure had ended on December 28. The order extending the terms of reference of the committee to determine the future of the project is likely to come in today (Monday). The nine other companies who had participated will be asked to rebid,” said the official.
NTPC Ltd, India’s state-owned power generation firm, and Reliance Energy Limited have both said the project should be awarded to them without any rebidding. NTPC has also demanded, on the basis of an earlier order of the Central Vigilance Commission, that the bidding process start afresh after the original winning bidder is disqualified.
“Giving the project to the L2 bidder (the second lowest bidder after Lanco, Reliance Energy Ltd) is not being considered as a viable option,” added the government official.
REL had quoted a tariff of Rs1.29 per unit compared with Lanco’s bid of Rs1.19 per unit (power projects are awarded to the company that quotes the lowest amount for each unit of power generated). NTPC had quoted a tariff of Rs2.12 per unit, while Tata Power and Larsen & Toubro had quoted Rs1.41 and Rs2.25 per unit, respectively.
The other bidders were Jindal Steel and Power Ltd, Sterlite Industries, Torrent Power, Jaiprakash Associates and Essar Power.
However, Lanco officials continue to insist that they will develop the project. “We are very clear that there is no basis for annulling the contract. We already have been awarded the letter of intent. We have already sent in a clarification to the Sasan Power Ltd board and will be writing another letter that will clear all wrong allegations,” said L. Madhusudhan Rao, chairman, Lanco Group.
The government had conceived the ultra mega power projects as a means to countering legal, regulatory and financial hurdles that made it unviable for companies in the private sector to participate in the power-generation business.
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First Published: Tue, Apr 03 2007. 12 29 AM IST
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