EGoM to decide on Sasan power project today

The fate of the 4,000-Mw Sasan ultra mega power project (UMPP) in Madhya Pradesh will be decided by an empowered group of ministers (EGoM) on Wednesday.

The EGoM, which includes Union Power Minister Sushilkumar Shinde, Finance Minister P Chidambaram, Law Minister H R Bhardwaj, Minister of Science and Technology Kapil Sibal and Planning Commission Deputy Chairman Montek Singh Ahluwalia, will meet tomorrow to take a final decision on the Rs 16,000 crore pithead coal-based project.

The issue was referred to the EGoM since neither the government nor the Power Finance Corporation (the nodal agency for implementing ultra mega power projects) could decide on the fate of the project, which has been mired in controversy after it changed hands from the Lanco-Globeleq consortium to the Lanco-Jindal partnership.

The Lanco-Globeleq consortium had won the project by quoting the lowest tariff of Rs 1.196 per unit, outbidding companies such as Reliance Energy. The consortium had received the letter of intent (LoI) in December 2006.

Initially, Ernst & Young, the bid process consultant to the Sasan project, was asked by the PFC to verify the bidders' qualifications and re-check Lanco-Globeleq's bid. In April, Ernst & Young said in its report that Globeleq had misrepresented facts about the company.

Lanco Infratech, however, refuted the claims and maintained that it didn't violate any bid conditions. The company also took legal advice from two former chief justices of the country on the issue.

Subsequently, the issue was referred to the power ministry and the law ministry, which also couldn't take any decision.

Finally, the matter was referred to the EGoM last month. The validity of the nine bids, which expired on June 5, has been extended to July 5.