Panel to meet soon to break Sasan logjam

The uncertainty surrounding the 4,000 Mw Sasan ultra mega power project might end shortly.

The evaluation committee headed by HDFC chairman Deepak Parekh will meet "soon after March 31" to decide on the project, said a member on the board of Sasan Power Ltd (SPL).

SPL is the shell company floated by the Power Finance Corporation (PFC) "" the nodal agency for implementing the ultra mega power projects. PFC officials and the representatives of states which would be buying power from these mega plants are on the board of SPL.

The term of the evaluation committee was extended two days ago and its scope expanded to find an early solution to the controversy surrounding the Rs 16,000 crore Sasan project.

The evaluation committee on Friday decided that Globeleq-Lanco consortium, which later morphed into Lanco-Jindal, was not eligible for the Sasan project due to "misrepresentation" by Globeleq. But the committee was unable to formalise its view as its term ended with the award of the project in Decmember 2006.

"With the evaluation committee back in action, it would be an unbiased and transparent procedure," said the Sasan board member.

Meanwhile, Lanco Infratech is yet to hear anything "official" on its proposed exit from the project. Sources said that the PFC wants Lanco to "amicably" leave the project without going through the litigation route, in return for which it would given back its bid bond of Rs 120 crore.

Lanco, however, is in no mood to relent, as of now. It has secured legal opinions from former Chief Justices of India to retain its hold on the project. The company's position is that "according to the terms of the bidding documents, the Letter of Intent (LOI) cannot be cancelled once it is awarded."

The LoI was awarded on December 28, 2006.

Lanco is, in fact, ready with the required performance bank guarantee of Rs 300 crore, signing of power purchase agreement (PPA) with the power off-takers and merging of the shell company (Sasan Power Ltd) with itself.

Lanco also holds the position that there has been no misrepresentation by its former partner Globeleq.