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Lanco combine, Tata Power emerge lowest bidders

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2 ultra mega power projects in Gujarat and Madhya Pradesh

New Delhi , Dec. 18

Tata Power Company and a consortium comprising Lanco Infratech Ltd and the UK-based Globeleq emerged as the lowest bidders to build two ultra mega power projects of 4,000 MW each at a total investment of up to Rs 40,000 crore.

While Tata Power outbid five players with a tariff of Rs 2.26 per unit for the proposed Mundra project in Gujarat, the Lanco-Globeleq combine quoted an aggressive tariff of Rs 1.196 per unit to outbid nine other companies for the Sasan project in Madhya Pradesh. The promoters for the two projects were to be selected on the basis of a tariff-based competitive bidding process conducted by state-owned Power Finance Corporation (PFC) and the bids were opened on Monday.

For the pit-head based Sasan project, the Lanco consortium's winning bid was followed by Reliance Energy's tariff quotation of Rs 1.29 per unit, Tata Power's bid at Rs 1.41 per unit, and NTPC Ltd's tariff of Rs 2.12 per unit.

For the imported coal-based Mundra project, besides Tata Power, Reliance Energy bid Rs 2.66 per unit, Adani Rs 2.70 per unit, Larsen & Toubro Rs 3.22 per unit and Sterlite Group bid Rs 3.74 per unit. The two projects would be awarded to the selected companies by this month-end. Financial closure is expected within six months and power generation is likely to start from 2010-11. Tata Power has joined hands with Germany's Siemens and South Korea's Doosan for equipment procurement and construction.

Interestingly, the Lanco consortium's winning bid of Rs 1.196 per unit was considerably lower that the average tariff of NTPC's operational stations, which stood at Rs 1.64 per unit for 2005-06.

Justifying the Lanco-Globeleq consortium's extremely competitive bid for the Sasan project, the Lanco Group Chairman, Mr L. Madhusudhan Rao, said: "It was possible for us to quote lower tariff only because of the size of the capacity of the project. This is a clear project without much risk and has huge coal blocks."

He said that Sasan Ultra Mega Power Project, by virtue of its location in Central India, made it easy for distribution of power through out the country.

Overseas investors such as AES Corp (AES) and Hong Kong-based CLP Group had, earlier, pulled out of the race, with the sole exception of Globeleq, citing inadequate bidding time as a constraining factor.

The Government is promoting the ultra mega power project initiative as part of efforts to boost power generation capacity by 70,000 MW by 2012. The Power Ministry plans to develop nine such projects. So far, PFC has set up separate SPVs for each of these projects to arrange necessary clearances such as those related to land, water, environment and forests.

Related Stories:
Domestic majors dominate bids for ultra-mega power projects
Ultra mega power plant final contracts by Dec 31
PFC to award two ultra mega power projects by Dec
PFC defers financial bids opening for ultra mega projects

More Stories on : Power | Infrastructure | Tata Power Co. Ltd

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