Sasan project's fate may be decided today
The 4,000 MW power project ran into trouble in February after alleged misrepresentation of facts by the Lanco-Globeleq consortium, reports Indulal PM.Updated: May 10, 2007 19:54 IST
The board of directors of the Sasan power project will meet on Friday to decide its fate. The 4,000 MW power project ran into trouble in February after alleged misrepresentation of facts by the Lanco-Globeleq consortium, which had won the contract for the project. The project was aimed at reducing the power shortage in Madhya Pradesh, Uttar Pradesh and Haryana.
"The board will review the developments. It will look at the option of postponing the project and will also discuss alternative plans," said a source close to the development on condition of anonymity. However, RS Johri, executive director of the Sasan power project, declined to comment on the issue.
In December the Lanco-Globeleq consortium had won the contract for the Sasan project quoting the lowest bid of Rs 1.19 per unit of electricity. The project went into difficulties after Globeleq Singapore was bought over by Lanco and Jindal Steel and Power in February.
According to sources, the bids submitted for the project will expire on June 6. "The board can ask the bidders to extend their validity for 30 days, but the power ministry does not want such an extension," sources said.
The board is expected to consider the views of the evaluation committee headed by HDFC Chairman Deepak Parekh and the recommendations of Ernst & Young, adviser to Power Finance Corporation (PFC), the nodal agency for setting up the ultra-mega power projects.
The government had set up an evaluation committee headed by Parekh to look into the bidding process. PFC and Ernst & Young, which had initially given a clean chit to the Lanco-Globeleq constortium, later found that its bid did not meet some criteria. Last month Globeleq had challenged Ernst & Young's deposition to PFC.
The power ministry is setting up nine 4,000 MW power projects in various parts of the country. The capital outlay on each will be Rs 16,000 crore. The contracts are to be awarded through bidding. So far two projects, Sasan and Mundra, have been cleared. The Mundra project was bagged by Tata Power.