NTPC defends high bid for Sasan mega power project

National Thermal Power Corporation (NTPC), which made an unsuccessful pitch for the contract to build the Sasan ultra-mega power plant, has defended its bid for the project.

While winning bidder Lanco committed to supply power at Rs 1.196 per unit, NTPC's bid was the most uncompetitive of the 10 bids received.

Terming NTPC's bid as "reasonable and concrete", NTPC chairman and managing director T Sankaralingam said the Rs 2.12 per unit price quoted by the company was "after thorough planning, taking into account all aspects like cost of equipment and other inputs that the project required".

"How can another company offer to supply power which is cheaper by over 90 paise per unit? It is for everyone to see how they supply power at this rate," he added.

While many industry players are skeptical about the winning bid, some feel that the bid is realistic given the cost advantages of a pithead coal project and the economies of scale of these 4,000 Mw ultra-mega projects.

Sankaralingam said if power was indeed supplied at the low rates, "it will be a lesson for all to learn and NTPC is ready to learn."

The company is now eyeing the Krishnapatnam ultra-mega power project in Andhra Pradesh based on imported coal. The winning bidder for this project is likely to be selected by March 31.

Power Secretary RV Shahi, the architect of the ultra-mega power projects, is expecting an excellent response for the Krishnapatnam project, which is a coastal project on the lines of the Mundra project in Gujarat, which has been bagged by Tata Power. "Krishnapatnam will attract better tariffs than Mundra," said Shahi.

While the lowest tariff quoted was Rs 2.26 per unit in Mundra, which is a levelised tariff for 25 years, the first year tariff is Rs 1.91 per unit.