Sasan project goes to Reliance Power

Written by Energy Bureau | New Delhi, Mumbai, Jul 30 | Updated: Jul 31 2007, 05:48am hrs
The Anil Ambani-controlled Reliance Power Ltd (RPL), a subsidiary of Reliance Energy Ltd (REL), has finally bagged the 4,000-mw Sasan power project. Under the second round of bidding called by the board of Sasan Power Ltd, RPL submitted the lowest tariff, of Rs 1.196 per unit (matching the earlier L1 bid), against bids submitted by NTPC and Jaiprakash Industries.

While Reliance Power lowered its earlier bid price of Rs 1.29 per unit, Jaiprakash Associates and NTPC Ltd did not budge from their earlier bids of Rs 1.6505 per unit and Rs 2.12615 per unit, respectively.

Speaking in Delhi on Monday, power minister Sushil Kumar Shinde, who heads the empowered Group of Ministers (EGoM) on ultra-mega power projects, said, The EGoM has advised that the procurer should consider taking immediate action to issue the letter of intent to the lowest bidder. The EGoM met for the fifth time to take a decision on the vexed issue.

We are delighted to have won Indias largest ultra-mega power project through an international competitive bidding process. We look forward to building this world-class infrastructure facility, REL chairman Anil Ambani said.

REL sources in Mumbai said the company would explore a debt-equity ratio of 70:30 or 80:20 to fund the project. The funds would be mobilised internally as well as from external sources comprising banks and financial institutions. Of the Rs 20,000 crore, Rs 16,000 crore would be required for the power project and Rs 4,000 crore for mine development, one source said.

Last December, the consortium of Lanco and Globeleq had outbid REL with a tariff bid of Rs 1.196 per unit. The consortium later broke up after Globeleq sold its stake to Lanco and Jindal Steel & Power Ltd. The bid was declared invalid after it was alleged that Lanco misrepresented facts at the request for qualification and request for proposal stages.

Sasan Power Ltd, the special purpose vehicle set up by state-run Power Finance Corporation to set up the Rs 20,000-crore project, had asked three other biddersRPL, NTPC and Jaiprakash Associatesto submit fresh bids.

RPL has been asked to complete the project in a span of less than five years.