Lanco-Jindal may lose Sasan

Bid evaluation committee wants the combine's 'amicable extrication' from the project.

The promise of easy power from the Rs 16,000-crore Sasan ultra mega power project seems distant as the project’s bid evaluation committee has decided to ease out the Lanco-Jindal combine as developers of the project.

The committee, headed by HDFC’s Deepak Parekh, decided to “explore an amicable extrication of Lanco from the project,” said an official closely associated with the 4,000 MW project.

Lanco, with its overseas partner Globeleq, had offered to supply power at an eye-popping Rs 1.196 per unit from the pithead coal-based project in Madhya Pradesh.

This was the lowest of the nine bids received to develop the project, and brought the Hyderabad-based Lanco to the national stage. Its bid was better than those from industry veterans like NTPC (Rs 2.126 per unit), L&T (Rs 2.251 per unit) and Jindal (Rs 1.799 per unit).

There were also some questions raised about the financial strength of Globeleq-Singapore, which was the entity partnering Lanco.

“The next step is a meeting between Lanco and the Power Finance Corporation (the nodal agency for implementing the project),” officials said.

Lanco’s Managing Director Madhusudhan Rao said he was yet to hear from PFC though he reiterated that he was “confident of getting the project.”

The evaluation committee wanted to ensure that the project should not suffer. “We want the project to take off,” said an evaluation committee member, who requested anonymity.

However, members of the committee, which includes the chairman and managing director of both PFC and Punjab National Bank, and the chairman of Central Electricity Authority (CEA), want the power from Sasan to be made available at the amount bid by Lanco-Globeleq.

One of the options being explored is to ask the second-highest bidder — Reliance Energy — to match the Lanco-Globeleq bid. Reliance had bid to supply power at Rs 1.296 per unit.

“The committee could not take a decision on this,” sources said, adding that another meeting would be scheduled shortly.

The other option of inviting fresh bids did not find much favour at the meeting. “The entire bidding procedure followed the guidelines and there’s no question of any wrongdoing,” said a committee member.

However, all members are keen to avoid any litigation that could delay the project.

Sources said the shell company set up by PFC — Sasan Power Ltd — is working on full steam to get the requisite clearances and approvals.

POWER PLAY

Committee undecided on asking second-highest bidder to match Lanco's bid to supply power at Rs 1.196 per unit The option of inviting fresh bids has not found favour Committee keen on avoiding litigation Lanco still confident of bagging the project