Lanco bid: Pseb to seek panel nod

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Old 26-Feb-2009
Lanco bid: Pseb to seek panel nod

Chandigarh February 26:

The Punjab State Electricity Board (PSEB) decided to approach the Punjab State Electricity Regulatory Commission (PSERC) to seek permission to award the 1320-MW Rajpura thermal plant project to Lanco Infratech Limited.

A decision to this effect was taken at a board meeting presided over by its Chairman HS Brar here. Sources said this was a mandatory requirement after the cabinet decided to clear the project. Earlier, the special purpose vehicle formed by the PSEB had opened the lone bid submitted by Lanco after taking the permission of the commission. However, the commission had stipulated that the board must come back to it after deciding the case.

The PSEB is likely to submit a report on the issue the fact that a negotiation committee headed by Chief Secretary Ramesh Inder Singh had conducted negotiations with Lanco and succeeded in bringing down the levelised tariff of Rs 3.38 per unit to Rs 3.30 per unit.

With a difference of one paise working out to a difference of Rs 10 crore per annum, PSEB sources said the negotiations with Lanco had made a substantial difference in the long term pricing over a span of around 30 years. The board had earlier ruled that it was difficult to go in for a rebid, which would take nine months as per Ministry of Power’s stipulations, and that there was no guarantee of a lower bid being received for the project due to the changed market conditions.

The commission on its part is likely to examine the fixed costs, which include money spent on establishment of the plant. With variable costs, that the money to be spent on running the plant being same for everyone, there might be objections regarding the high fixed costs of the company vis a vis Sterlite, which has recently bagged the 1980 MW Talwandi Sabo thermal power plant project. Sterlite’s fixed costs are said to be 52 paise lower than that of Lanco.

Old 26-Feb-2009
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