Winning bid for Sasan under probe

The fate of the 4,000 Mw Sasan ultra mega power project seems uncertain with the entire bidding process being questioned.

The winning bid of Globeleq, the lead partner in the consortium with Lanco, is said to be fraught with discrepancies.

It is alleged that Globeleq Singapore did not fulfil the criteria set for the bidders, neither on the networth basis nor on the basis of experience.

Also, Globeleq Ltd, the parent company, had not extended guarantees to Globeleq Singapore for the bid.

The issue was raised by Congress MP Gurudas Kamat in the Parliamentary Steering Committee meeting. He asked whether the sale of equity by Globeleq Singapore Ltd to Lanco Infratech and Jindal Steel was permitted.

While earlier, the Power Finance Corporation (PFC), the nodal agency of the project, was blamed for not plugging the loopholes, fingers are now being pointed at Ernst and Young, the financial consultant for the Rs 16,000-crore project.

A very senior government official close to the development said, "It is the financial advisors who are to be blamed."

"PFC is not at fault because it is just a funding agency for the shell company (Sasan Power Company in this case), which had appointed the technical and financial consultants," added the official.

Kamat, who chairs the Standing Committee on Energy, also sought to know if Jindal Steel, which had earlier submitted a bid, could be permitted to be a part of two bids and if the consortium had qualified if Lanco had been the majority partner.

"Since this is an important project creating benchmarks for future projects, I am sure that any trading of project by the lead developer (Globeleq) would not be permitted and would automatically lead to disqualification of the bid," he said.

Lanco infratech Chairman L Madhusudan Rao is still confident of getting the project. He said Lanco was ready with the bank guarantee of Rs 300 crore.

PFC officials refused to comment saying "the matter is still under examination."

Some industry observers say the controversy will have a negative bearing on future ultra mega power projects.

The government should try and resolve it at the earliest, they say. "It is imperative that work on the first two projects should begin," said a power expert.