Ultra-mega power problems

BACKSTAGE

Shyam Wadhera is a stressed man these days. Little did this director (projects) at the Power Finance Corporation (PFC) know that an increase in his responsibilities last year, when he was designated the chairperson for the two shell companies set up to pilot the 4,000 mw ultra mega power projects at Sasan and Mundra, would put him in a knotty situation.

While the Mundra project has been smoothly transferred to its new owner "" Tata Power "" it is the Sasan project which is challenging the faculties of this 50-something electrical engineer from Kanpur's Indian Institute of Technology. Just seven months ago, the tall and suave Wadhera was beaming with joy when the letters of Intent (LoIs) for the country's first two ultra mega power projects were awarded to Lanco Infratech and Tata Power in December 2006 on the basis of tariff-based competitive bidding. This was the first time that the country was seeing projects of this magnitude come up to solve the precarious power situation in the country.

Wadhera, as head of the shell companies Sasan Power Ltd and Coastal Gujarat Power Ltd, had overseen the shaping up of the projects which were to set a benchmark for the rest of the country. This was a defining moment for this former executive director of NTPC who had taken on the challenge of power financing in 2003 when he joined the PFC board. Incidentally, he is also one of the directors of Vidyut Vyapar Nigam Limited "" the power trading wing of NTPC Ltd.

Last week, speculation on the validity of Lanco Infratech's bid for Sasan ended with the empowered group of ministers (eGOM) declaring the bid void. The eGOM also asked the board of Sasan Power Ltd, which is led by Wadhera, to decide on the future course of action. That is a tricky task, given the corporate interests at stake and the political affiliations of the parties involved. And on top of that, he has to fend off an increasingly aggressive media. That is changing his easy-going and friendly disposition. "He seems stressed out and jittery most of the time," says an official who knows him well.

He has been in the thick of action from the moment Lanco's international partner Globeleq opted out of the venture earlier this year. Globeleq's stake was bought by a venture of Lanco and Jindal Steel and Power, one of the unsuccessful bidders for the Sasan Project. Other unsuccessful bidders like Reliance Energy raised objections to this arrangement even as a host of political leaders and legal luminaries issued statements supporting one party or the other. Wadhera will have to leverage his 36 years of experience in the power sector, both in the private and the public sector, not only to resolve the issue judiciously but also to make sure he does not become the scapegoat for any omissions and commissions in the final decision.

Right now, he is probably hoping that the Sasan project will have a new owner as early as next week, as mandated by the eGOM. That would take the Sasan issue off his hands. However, it is likely that he will have a long trudge in front of him as parties hit by the decision are unlikely to let go of a Rs 16,000 crore project without a fight.