Sasan go-ahead for REL tomorrow

Sasan Power Ltd, the special purpose vehicle floated by Power Finance Corporation for the 4,000 MW project, will on Wednesday issue the Letter of Intent to Reliance Power Ltd - two days after the ADA Group company won the project by quoting the lowest bid of Rs 1.19 per unit.

"Sasan Power Ltd is issuing the Letter of Intent for Sasan ultra mega power project tomorrow (Wednesday)," a PFC official said. Reliance Power, a subsidiary of Reliance Energy, outbid NTPC Ltd and Jaiprakash Associates to bag the project.

Sasan project, to be set up in Madhya Pradesh with an investment of Rs 20,000 crore (Rs 200 billion), was the first of the nine such mega projects to be set up by private players through a tariff-based competitive bidding process.

The contract was initially awarded to a consortium of Lanco Infratech and Singapore's Globeleq in December, which quoted a Rs 1.19 KWH price. But the consortium later broke when Globeleq sold its 70 per cent stake to Lanco and Jindal Steel and Power Ltd. The change in ownership and allegation of Lanco-Globeleq misrepresenting facts in their bidding documents forced an Empowered Group of Ministers, headed by Power Minister Sushilkumar Shinde, last week to declare Lanco's bid as invalid.

The Group on Monday approved awarding the project to Reliance Power Ltd.