The Hindu : Business : Lanco’s bid declared invalid

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Wednesday, Jul 25, 2007
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Lanco’s bid declared invalid

Special Correspondent

Sasan Power directed to examine future course of action

NEW DELHI: The Empowered Group of Ministers (EGoM) on ultra mega power projects on Tuesday declared the Lanco-Globeleq combine’s bid for the 4,000 MW Sasan project as invalid. There is, however, no word on whether bids for the plant are to be invited afresh.

Power Minister SushilKumar Shinde told newspersons here that the EGoM had declared Lanco’s bid for the project as ‘void ab-initio’ (invalid from the outset) at the Request for Qualification (RFQ) stage. The ministerial group, however, did not take any decision on the next step — whether to invite fresh bids again or award the Rs. 20,000-crore project to the second-lowest bidder, Reliance Energy. Lanco, it may be recalled, had pipped REL with a tariff bid of Rs 1.196 per unit. Soon after, the consortium broke up as Globeleq dropped out by selling its stake to Lanco and Jindal Steel and Power Ltd.

The EGoM, Mr. Shinde said, had now directed Sasan Power Ltd., the special purpose vehicle (SPV) set up by Power Finance Corporation (PFC) for implementation of the project, to examine the future course of action. The EGoM, which had its fourth meeting on Tuesday, was set up to resolve the imbroglio over the project as it was alleged that Lanco had misrepresented facts during the process of bidding process.

To ensure that such problems do not arise again, Mr. Shinde hinted at certain changes in the RFQ documents itself while noting that there would be ‘greater vigilance’ while processing preliminary bids.

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