Sasan project set to take off, ADAG firm gets letter

The 4,000-Mw Sasan ultra mega power project has finally got its owner. The Anil Dhirubhai Ambani Group (ADAG) company, Reliance Power Ltd (RPL), was today awarded the Letter of Intent (LoI) for the project by Sasan Power Ltd (SPL). SPL is the shell company floated by the Power Finance Corporation ( PFC) to pilot the Rs 20,000-crore project.

RPL, in a revised bid for the pithead-coal project, had promised to supply power at Rs 1.196 per unit, matching the original bid of Lanco-Globeleq consortium, which was disqualified by an Empowered Group of Ministers (EGoM) last week.

In the last five years, RPL has commissioned just 268 Mw capacity. By bagging the Sasan project, it now faces the task of adding 4,000 Mw in about the same period (69 months). To meet this target, the merger of SPL and RPL will be done within two weeks instead of the normal time of 60 days.

By winning the project, RPL ended seven months of deadlock arising out of misrepresentation of facts by Lanco-Globeleq combine to qualify for the project. Power generated from the project will be supplied to northern and western regions.

RPL will have to submit a performance guarantee of Rs 300 crore and sign power purchase agreements (PPAs) with power procurers. It will also have to sign the escrow and share-transfer agreements.

Last week, the EGoM had declared Lanco Infratech's bid of Rs 1.196 invalid while asking three other bidders, RPL, Jaiprakash Industries and NTPC, to send revised bids. Both NTPC and Jaiprakash quoted the amount they had quoted in the earlier round.

SPL Chairperson Shyam Wadhera said there were some contractual and legal issues with Lanco's bid which needed to be examined.

However, the SPL Board found that it was Globeleq which furnished wrong information in its bid documents and hence Lanco had not been disqualified for other future projects.