Lanco likely to get Sasan cancellation letter next week

New Delhi, Mar 29 | Updated: Mar 30 2007, 07:12am hrs
The Deepak Parekh-headed evaluation committee is likely to announce the cancellation of the letter of award to the Lanco Infratech-Globeleq Singapore combine for the 4,000 mw Sasan ultra mega power project at its next meeting, slated for April 2 or 3.

A senior PFC official closely associated with the controversial developments related to Sasan power project confirmed to FE that the winning consortium of Lanco and Globeleq Singapore will not be awarded the Sasan project.

Asked about the future course of action, the official said, It is now for the state governments to decide what they want. Three of the six states -- major beneficiaries from this project -- were present at the last meeting. All three -- from Madhya Pradesh, Uttar Pradesh and Haryana-- who are also part of the apex committee, opposed the proposal of re-bidding and suggested that the L2 bidder be asked to match the winning bid. Madhya Pradesh is the main beneficiary of power from the Sasan project."

The other three remaining states of Punjab, Delhi and Rajasthan have also been asked to submit their views on whether fresh bids should be called or the L2 bidder be asked to match the wining bid. The PFC official also put to rest speculation on the exit of Shyam

Wadhera, another senior PFC official associated with the award process for Sasan project.

Wadhera is very much on board and the news of his exit is completely false," he said, adding that PFC will shortly sent a correction note on this. As the term of the evaluation committee had expired, the official announcement on throwing out Lanco-Globeleq out of the race for Sasan was held back.

We are now discussing whether to invite fresh bids or ask L2 to match the L1 offer. Is this not a clear indication of Lanco's exit from the project, the official said.

The committees tenure has been extended and a final decision will be announced on Monday, when it meets again.

When contacted, a Lanco Infratech official said the company was yet to hear anything on its exit from the project. He said Lanco was in the process of taking a legal opinion and will challenge any such decision of PFC.

PFC sources said, the nodal agency was also ready to return the bid bond of Rs 120 crore submitted by Globeleq-Lanco combine.

Since the developments on Globeleq UK's exit were beyond the control of either Lanco or Jindal, we may return the bid bond amount to the consortium. This is provided they leave amicably," he said.

The validity of the letter of intent (LoI), awarded to Lanco on December 28, 2006, may be challenged in case its bid being scrapped. A Lanco release said the consortium had given its consent to comply with further conditions such as giving performance bank guarantee of Rs 300 crore, signing power purchase agreement with the power off takers and buying of Sasan Power Company from PFC.

As per Lanco, there was no misrepresentation on the part of the consortium and no one can deny the collective strength of the consortium.