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Lanco out of Sasan project

business Updated: Jul 25, 2007 02:46 IST
M Rajendran
M Rajendran
Hindustan Times
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An empowered Group of Ministers has held Lanco-Globaleq’s bid for the 4,000 Megawatt Sasan power project invalid for misrepresenting facts. The Hyderabad-based Lanco Infratech is likely to move court on the issue.

Sources in the power ministry said that according to the per tender norms the second lowest bidder would be called to take up the project, which in this case is Reliance Energy. There are three valid bidders: Reliance Energy at Rs 1.29 a unit, JP Associates at Rs 1.65 and NTPC at Rs 2.13.

However, there was no official confirmation on the award of the contract to Reliance Energy. A government statement said Sasan Power Ltd, the special purpose vehicle set up by Power Finance Corporation, would examine the issue and submit its recommendations to the ministerial group.

The statement said the Lanco-Globaleq bid was void ab-initio, that is from the outset.

Power Finance Corporation is the nodal agency to implement the clutch of 4,000 Mw power projects that was kicked off by the Sasan and Mundra contracts.

Union Power Minister Sushil Kumar Shinde said Sasan Power Ltd would submit its report this week on the steps to be taken.

A power ministry official who attended the meeting on Tuesday, speaking on condition of anonymity, said, “The Lanco-Globeleq bid was disqualified as the legal opinion was that the consortium had violated norms after the foreign partner walked out.”

The Lanco spokesperson declined to comment. However, sources in the company said, “Legal option is the only way out left for us.”

The Reliance Energy spokesperson when contacted for comments said, “We have no official information on our status, hence we cannot comment.”