Group of ministers to discuss Lanco bid today

Group of ministers to discuss Lanco bid today
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First Published: Wed, Jun 20 2007. 12 27 AM IST
Updated: Wed, Jun 20 2007. 12 27 AM IST
Mumbai: In a bid to resolve the controversy surrounding the Sasan ultra mega power project, the Union government on Tuesday constituted an empowered group of ministers that will study the issue and come up with solutions.
The group comprises power minister Sushil Kumar Shinde, finance minister P. Chidambaram, law minister H.R. Bharadwaj, science and technology minister Kapil Sibal and deputy chairman of the the Planning Commission Montek Singh Ahluwalia.
The group is slated to meet on Wednesday to decide whether the government will allow the winning bidder, the Hyderabad-based Lanco Infratech Ltd, to go ahead with the project, ask for fresh tenders for the 4,000MW ultra mega power project in Madhya Pradesh, or award the project to the second lowest bidder.
Reliance Energy Ltd, which supplies power to large parts of Mumbai city, was the second lowest bidder for the project, with a tariff of Rs1.29 per unit.
The project was originally awarded to a consortium of Globeleq Singapore Pte Ltd, a subsidiary of Houston-based Globeleq, and Lanco, which had bid Rs1.19 per unit.
Subsequently, Globeleq sold some of its assets around the world including the Singapore unit, which was acquired by Lanco and Jindal Steel and Power Ltd.
Other bidders then protested saying that this changed the constitution of the winning consortium.
A parliamentary standing committee on power, headed by Congress member of Parliament Gurudas Kamath, also expressed concern over this. The issue was referred to the attorney general of India Milon Banerjee by the Power Finance Corp., the agency in charge of the ultra mega power projects that were conceived in 2005 as fast-track projects to augment India’s power generation capacity.
Officials in the power ministry, who did not wish to be named, said that Wednesday’s meeting would discuss the reports of the standing committee, the attorney general, and audit firm Ernst & Young, the adviser to Power Finance Corp. on the project.
The findings of the three reports have not been published or publicized.
In March this year, an evaluation committee headed by Housing Development and Finance Corp. Ltd chairman Deepak Parekh had suggested that the Lanco consortium should be asked to pull out of the bid but left the question of fresh bids open.
The validity of all bids expired on 5 June and the board of Sasan Power Ltd, the special purpose vehicle set up for the project, extended their validity by a month.
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First Published: Wed, Jun 20 2007. 12 27 AM IST