The Telegraph
Since 1st March, 1999
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Jindals lose Sasan, REL sniffs scope

New Delhi, July 24: The Jindals have finally been vanquished in the battle for the 4000mw Sasan project.

On Tuesday, the empowered group of ministers headed by power minister Sushil Kumar Shinde decided to scrap the allotment of the project to the lowest bidder, the Lanco-Globeleq consortium.

Globeleq had sold all its interests outside the US shortly after winning the contract, including the Singapore-based subsidiary that had bid for the project with Hyderbad-based Lanco Infrastructure.

Globeleq sold its 70 per cent stake in the joint venture to Lanco and Jindal Steel and Power, prompting Anil Ambani’s Reliance Energy — which had put in the second best bid — to cry foul.

Lanco had outbid REL with a power tariff bid of Rs 1.196 per unit to the latter’s Rs 1.29 per unit.

Jindal Steel and Power had also bid for the Sasan power project but had been pipped by Lanco-Globeleq and Reliance Energy.

Shinde said the E-GoM had declared Lanco’s bid as void ab-initio (invalid from the outset).

The panel, which included finance minister P. Chidambaram, law minister H. R. Bhardwaj, minister of science and technology Kapil Sibal and Planning Commission deputy chairman Montek Singh Ahluwalia, did not take any decision whether to award the Rs 20,000-crore project to Reliance Energy or invite fresh bids.

The power ministry has been opposed to the idea of fresh bids as it will delay the plan to establish nine ultra mega power projects in the country, which is central to the government’s stated objective of providing power to all by the year 2012.

The E-GoM, which met for the fourth time today, was set up to resolve the imbroglio over the project after it was alleged that Lanco misrepresented facts during the bidding process.

Shinde said the E-GoM had directed Sasan Power Limited, a special purpose vehicle set up by Power Finance Corporation, to examine the future course of action.

“It will have to submit a report within the next three to four days and the E-GoM will then consider it,” he added.

The spokesperson for Reliance Energy declined to comment on the development. “We haven’t heard anything from the government,” he said.

However, sources said Reliance Energy was pushing its case for the award of the project. At the recent annual general meeting, Anil Ambani had said that if Lanco lost out “we automatically should get the project”.

The state-owned NTPC had offered to sell power at Rs 2.12 per unit — putting in one of the most expensive bids along with Tata Power which had bid Rs 2.25 per unit.

Earlier, in a letter to Shinde, Rajya Sabha MP and Citu leader Tapan Sen had said the tariff quoted by the NTPC was baffling.

The Left suspects that this was part of a “game” to ensure that a private bidder emerged victorious. NTPC had tied up with Bhel to bid for the Sasan project.

NTPC had blamed Bhel for its inflated bid and had said it would consider bidding on its own for other big power projects.

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