The Hindu Business Line : Sasan power project issue for GoM

Bidding imbroglio
The panel is likely to be asked to deliver a fast-track verdict on the issue.
Bidders were asked to extend the validity of the bid bond submitted by them.

New Delhi June 5 After prolonged delays, the Centre has decided to refer the Sasan Ultra Mega Power Project bidding imbroglio to an empowered Group of Ministers (GoM) for a final decision.

The panel is likely to be asked to deliver a fast-track verdict on the issue since the bids submitted by the Lanco-Globeleq Singapore combine and other bidders, which have already been given a `one-time' extension of 30 days, now expires on July 6 as per the revised deadline.

The bids, which were submitted on December 7, 2006, were to originally expire on June 6 (180 days from the date of submission of bids).

Original Estimates

The board of Sasan Power Ltd — the special purpose vehicle created by Power Finance Corporation to kickstart the project — had, on May 25, extended the validity of the bids submitted by all shortlisted bidders by 30 days to July 6, as per the provisions of clause 2.9.2 of the Sasan project's Request for Proposal.

Simultaneously, the bidders were asked to extend the validity of the bid bond submitted by them along with their respective bids.

The Centre had issued Letters of Intent (LoI) to the Lanco-Globeleq Singapore combine for the Rs 16,000 crore Sasan project way back on December 28 last year.

According to the Government's original estimates, the transfer of the shell company to prospective promoters, besides the signing of the power purchase agreements and the submission of bank guarantees, was to have been done within 60 days of the issue of the LoI — by February 26 this year.

Rival Bidders

However, the schedule for award of the coal-based project got derailed following the sale of 100 per cent of Globeleq Singapore by its parent, Bermuda-based Globeleq Ltd (a unit of UK's CDC Group Plc) in February. Jindal Steel and Power Ltd and Lanco Infratech's Mauritius-based holding company together acquired the 100 per cent stake in Globeleq Singapore — a move that has been challenged by rival bidders for the project.

Subsequently, PFC raised the issue of Lanco-Globeleq having "misrepresented" information pertaining to certain technical and financial capability claims furnished by the combine in its Sasan bid document.

The delays in the award of the first set of the 4,000 MW Ultra Mega Projects has made the prospect of even a single project getting operational during the current Eleventh Plan period appear extremely bleak.