The Hindu Business Line : Lanco bid for Sasan ‘invalid’

New Delhi, July 24 The Lanco-Globeleq consortium’s winning bid for the 4,000-MW Sasan Ultra Mega Power Project has been declared as invalid. A decision on whether fresh bids are to be called for the project or hand it over to the second lowest bidder — Reliance Energy Ltd — after price negotiations is expected over the next four days, official sources said.

The Empowered Group of Ministers (EGoM), set up to resolve the imbroglio over the Sasan project, declared on Tuesday Lanco’s bid as “void ab-initio” (invalid from the start) at the Request for Qualification stage, the Power Minister, Mr Sushilkumar Shinde, told presspersons here after the meeting.

He said the EGoM has directed Sasan Power Ltd, a special purpose vehicle set up for kickstarting the project, to examine the future course of action. “The EGoM has directed, that keeping in view the overall public interest and the terms and conditions of the bid documents, Sasan Power Ltd shall examine the further course and submit its recommendations to the EGoM expeditiously,” a statement released by the Power Ministry later in the day said.

Mr Shinde said he expected the report to be submitted by Sasan Power within 3-4 days, based on which the EGoM would consider the future course of action on the issue. The Lanco-Globeleq Singapore combine had quoted the lowest tariff bid of Rs 1.196 per unit for the project, outbidding Reliance Energy Ltd’s tariff bid of Rs 1.29 per unit. The Rs 20,000-crore coal-based project’s handover to the winning consortium, however, got derailed following the sale of 100 per cent of Globeleq Singapore by its parent, Bermuda-based Globeleq Ltd in February.

Jindal Steel & Power Ltd and Lanco Infratech’s Mauritius-based holding company jointly acquired the 100 per cent stake in Globeleq Singapore — a move that was challenged by rival bidders. Subsequently, PFC and bid consultant Ernst & Young raised the issue of Lanco-Globeleq having "misrepresented" information pertaining to technical and financial capability claims furnished by the combine at the bidding stage.