A senior official of the BSES involved with the project confirmed that the power major was presently re-evaluating the bids received for the project and finaNcial closure for the project would be achieved after signing of the PPA (power purchase agreement) with the Tamil Nadu Electricity Board, techno-economic clearance by the Central Electricity Authority (CEA) and reviewing of the consultants' report. The consultants for the project, Krishnan of Tamil Nadu are expected to submit their report next week. He, however, refused to disclose the names of the companies which had submitted bids for the project.

According to Sources, it is almost certain that L&T and Ansaldo are out of the reckoning already. Insidersrevealed that not only was the L&T bid "astronomically high" but also that both Ansaldo and L&T had offered pulverised coal fired boiler technology which was "not an ideal system of burning lignite which is to be the fuel for this project." It may be mentioned that BSES is developing new lignite mines in the same region as a separate project.

On the other hand, the Korean multinational Hanjung as well as BHEL have offered circulating fluidised bed combustion (CFBC) boiler technology which would, according to technical experts, provide the "best possible plant availability factor and higher efficiency on lignite firing."

But in this case too, though BHEL have so far set up one 110 mw plant using this technology for the Gujarat Industrial Power Company Limited (GIPCL), the plant has reportedly been facing several problems ever since its commissioning. In fact, GIPCL sources confirmed that a team of engineers from BSES had recently apprised themselves of this aspect ostensibly to check out the efficiency ofthe BHEL technology.

This only leaves Hanjung in the fray which has supported its offer by proven technology in CFBC boilers provided by Foster Wheeler of US. What also gives Hanjung an edge in the EPC contract is the fact that they are reportedly the lowest bidders in the final bidding. Interestingly, as per market information available, Hanjung is presently scouting around for a sub-contractor for the project and has already shortlisted a few domestic corporate companies in the power business.

It may be mentioned that BSES holds "in principle" clearance from the CEA for setting up a new 1x250 mw IPP through its subsidiary, Ticapco. After the initial round of international competitive bidding for the project, however, BSES had to resort to rebidding and had recalled offers in view of the fact that almost all the bids received had been on the higher side. Despite this, rebidding has not changed the scenario much and BSES sources confessed that the project cost is still a relatively high Rs 6 crore/mwwhich takes the total project cost to around Rs 1,500 crore.

When asked what the financing pattern would be, BSES sources pegged it at 70:30 which works out to an equity of Rs 500 crore and debt to the tune of Rs 1,000 crore. It is expected that the BSES would finalise the EPC contractor for the project soon as the company hopes to issue the notice to proceed to the selected EPC contractor by the end of September this year to ensure that the power plant could be commissioned by September 2002 as per the plans of the the Tamil Nadu government.