The Hindu Business Line : `Lanco combine quote for mega project feasible'

THE POWER SECRETARY, Mr R.V. Shahi, addressing a conference on `Merchant power: Towards developing power markets', in the Capital on Tuesday. - Kamal Narang

New Delhi , Dec. 19

The Government on Tuesday described the power generation tariff of Rs 1.196 per unit proposed by the Lanco Infratech-Globeleq combine for the 4,000 MW Sasan Ultra mega power project as "feasible" since a number of bidders had quoted tariffs in the same range for the proposed project.

"A level of comfort is that there were a number of developers who had computed the tariff in the range of Rs 1.29 to Rs 1.40 per unit," the Power Secretary, Mr R.V. Shahi, told reporters at the sidelines of a seminar here. The sheer size of the project, he said, would have helped the developers take advantage of the economies of scale.

"Super critical system gives you an advantage of fuel input and cost of power which has helped lowering the tariff," he added.

The Lanco-Globeleq combine quoted a tariff of Rs 1.196 per unit to outbid nine other companies for the pithead-based Sasan project in Madhya Pradesh. The Lanco consortium's winning bid was followed by Reliance Energy's tariff quotation of Rs 1.29 per unit, Tata Power's bid at Rs 1.41 per unit, and NTPC Ltd's tariff of Rs 2.12 per unit.

Mr Shahi said the country would also benefit from idle equipment manufacturing capacity in China.

"China has a equipment manufacturing capability of 60-70,000 MW and with the rate of installation of mega power projects there going down considerably, the manufacturers are worried," he said.

"We gave our bidders enough time to talk to global suppliers and I am sure they have benefited from the situation in China," he added.

Asked about the next two mega power projects in the pipeline — the proposed Krishnapatanam and Jharkhand projects, he said the Krishnapatanam project will be awarded by April next year and the Jharkhand project by May 2007.