INDIA: Sasan UMPP may go to Reliance Energy

Anil Ambani's Reliance Energy Ltd (REL), which lost the Sasan ultra mega power project to Lanco by a thin margin of 10 paise per unit, may bag the project in case Globeleq decides to walk out of the consortium.

According to a Power Finance Corporation official, in case Globeleq which has a 70 per cent equity stake in the project dilutes its stake below 51 per cent, then the Sasan UMPP will go to the second lowest bidder, Reliance Energy Ltd.

"The terms and conditions for the project are applicable only if they (Lanco and Globeleq) are together. The project is awarded to a consortium and in case Globeleq dilutes its stake below 51 per cent then they are out and the project will go to L2," a PFC official said.

He said the bid document clearly says any request for change in membership of the consortium would be considered only upon the bidding consortium making a written application to the authorised representative seeking its approval for such change at least 45 days prior to the last date of submission of RFP bids.

"A change in composition of consortium will be permitted only once, provided the lead member is not being proposed to be changed," he said.

The last date for the submission of the letter of acceptance is February 28.

The Lanco-Globeleq consortium had in December 2006 won the Rs 20,000 crore 4,000 MW project to be set up in Madhya Pradesh. Reliance Energy, which lost out to the Globeleq-Lanco consortium, had put in a bid of Rs 1.29 per unit and was the second-lowest bidder. Lanco had quoted a price of Rs 1.196 per unit.

A Lanco Infratech official had on Monday stated that they are willing to buy out Globeleq from the Sasan project. "In case, Globeleq decides to pull out from the JV, we are open to buying their equity in the project," Lanco Executive Director M N Ravi Shankar said.

Shankar, however, said Globeleq had yet to communicate its stand on Sasan to Lanco. "We are in talks with Globeleq for settling the issue. We have not yet received a formal communication from them," he said.

The developments come even as Globeleq has put its entire global assets on the block amidst speculation about a possible exit from the Sasan project. Globeleq, the lead partner in the Lanco-Globeleq consortium, is undertaking a massive restructuring programme wherein the British power investment company is exiting from emerging markets - Asia, Africa, America.

It is understood that Globeleq has appointed Lehman Brothers to carry out the transactions.