Lanco's Sasan bid annulled

Reliance Energy may get look-in, decision in a week.

The empowered group of ministers (EGoM) on ultra mega power projects today said that Lanco Infratech's bid to build the 4,000 Mw Sasan project is "void" following a change in its joint venture partner after it won the bid.

It, however, left the decision on the future course of action on the project to Sasan Power Ltd, the company floated by Power Finance Corporation (PFC) to pilot the Rs 16,000-crore project.

"The EGoM has declared Lanco's bid as 'void ab-initio' (invalid from the outset)," said Power Minister Sushil Kumar Shinde, who is also heading the EGoM. An EGoM is empowered to take a final decision on a specific issue and does not require Cabinet approval.

Sasan Power Ltd would now decide whether there should be fresh bidding, rebidding by a limited set of bidders or award of the project to the second best bidder "" Reliance Energy Ltd (see chart).

According to an official closely associated with the Sasan project, the bid documents state that "if due to some reasons the L1 [winning] bidder is unable to go ahead with the project, then L2 [or next best] bidder can be considered." "Therefore, awarding the project to the L2 bidder can be an option, but it is not a certainty," he said.

Lanco can also bid again should "rebidding" take place, clarified Shinde.

Sasan Power Ltd has been asked to take a decision "keeping in view the overall public interest and the terms and conditions of the bid documents".

The board of Sasan Power is expected to meet shortly and finalise its views. These may then be taken to the PFC board before being handed over to the EGoM.

"All this is likely to be done in a week," said an official closely connected with the developments.

The EGoM, which met for the fourth time today after a gap of 20 days, was set up to resolve the Sasan impasse.

PTI adds: The Uttar Pradesh government today ruled out going back on its decision to award the Anpara C power project to Lanco Infratech.

SASAN: AN ULTRA-MEGA CONTROVERSY

December 2006 Hyderabad-based Lanco Infratech, in partnership with Globeleq Singapore, bags the bid to build the 4,000 mw Sasan ultra mega power project by offering to supply power at a record low price of Rs 1.196 per unit beating NTPC (Rs 2.126), L&T (Rs 2.251), Jindal Steel and Power (Rs 1.799), Reliance Energy (1.296) and Tata power (Rs 1.412)

February 2007 Globeleq's promoters change. It is now owned by Lanco and Jindal, one of the unsuccessful bidders in the project, through an SPV "" Prince Stone Investments "" even as questions are raised about alleged "misrepresentation" in the bid.

April 2007 Ernst & Young says Lanco-Globeleq bid is invalid.

June 2007 Issue is referred to an empowered group of ministers (EGoM) headed by Power Minister Sushilkumar Shinde

July 24, 2007 EGoM declares Lanco's bid "void". Next step to be decided by Sasan Power Ltd "" shell company floated by PFC "" on whether to call for a rebid or award project to second best bidder. Shinde says Lanco can bid again.

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E&Y for fresh Sasan power project bids

Winning bid for Sasan under probe

Sasan success is cold comfort for Lanco