Bidder 1 out, mega power project goes to Reliance

Power Minister Sushilkumar Shinde told reporters here that the Reliance Power8217;s 8220;revised bid of Rs 1.1961 was the lowest of the three revised bids8221;. Jaiprakash and NTPC were the other bidders but they did not cut their price from the original Rs 1.65 and Rs 2.12 per unit. Reliance Power, a unit of Reliance Energy, shaved 10 paise from its earlier bid of Rs 1.29 per unit to bag the project.

8220;We are delighted to have won India8217;s largest ultra mega power project through an international competitive bidding process,8221; Anil Ambani said in a statement today. Reliance Energy shares surged 5 per cent to Rs 802 in intra-day trading on Bombay Stock Exchange after reports of winning the project.

A rough calculation shows that the reduced Reliance Power bid will save the eight beneficiary states 8212; Madhya Pradesh, Uttar Pradesh, Delhi, Haryana, Punjab, Rajasthan, Uttaranchal and Chhattisgarh 8212; about Rs 350-400 crore a year. According to Reliance, the power-cum-coal mining project would need an investment of around Rs 20,000 crore.

After the meeting of the EGOM today, Shinde said the procurer Sasan Power should 8220;consider taking immediate action to issue the letter of intent to the lowest bidder8221;. He said that the government would not encash Lanco8217;s entire Rs 120-crore bid bond guarantee.

Earlier, Lanco said in newspaper advertisements that it disagreed with its disqualification from the Sasan project but accepted the ministry8217;s decision. The government has said that the Hyderabad-based firm would be allowed to bid for future projects.

The Sasan project had reached a dead end after it emerged that the lowest bidder 8212; the Globeleq-Lanco combine 8212; had a change in ownership and may even have misrepresented facts in the tender.