Punjab Newsline
Lanco’s bid for Rajpura Thermal to go to PSERC for approval
VINOD KUMAR GUPTA
Sunday, 22 February 2009
CHANDIGARH: After the approval of Punjab Government Lanco’s negotiated bid for 1320 MW Rajpura thermal plant, the bid now will go to Punjab State Electricity Regulatory commission (PSERC) for approval of rate.

PSEB will be forwarding the case to PSERC for approval in coming days being the lone bidder for the project. Earlier PSEB had sought the approval of PSERC for opening of single bid of Lanco for Rajpura thermal.

The PSERC may seek the justification from Lanco for rate as there is only single bidder for the project. It may be mentioned that the Lanco’s revised bid is on higher side from the quoted rates by Sterlite for Talwandi Sabo project. Lanco’s negotiated bid at 330 paise per unit for Rajpura Thermal Project is still 44 paise higher from the Sterlite’s offer for Talwandi Sabo.

According to sources there is huge difference of 62 paise per unit in the fixed cost of Sterlite’s offer for Talwandi Sabo and Lanco’s offer for Rajpura Thermal Project. Lanco has quoted Rs.1.829 per unit as fixed charges where as Starlite had quoted Rs.1.20 per unit for Talwandi Sabo project.

It may be mentioned that the fixed cost of 182.9 paise per unit quoted by Lanco is more than the levalised tariff of 177 paise per unit of recently awarded Taliyya project.

According to senior thermal expert the variable cost of fuel components for both projects should have the same but Lanco’s variable charges are Rs.1.48 paisa per unit against Starlite’s Rs.1.66 paise per unit. This implies the offer of Lanco is going to increase by another 20 paise per unit to adjust variable cost as per actual.

Hs Bedi President of PSEB Engineers Association said that if the state Government thinks the price offer of Lanco’s revised bid of 330 per unit is justified then it may have adverse effect on Sterlite’s Talwandi Sabo project which has been awarded at much lower rates.

Bedi further said that a negotiated price is always subject to criticism for future. A variation of one paise per unit costs the state Rs. 10 crore every year and Rs. 300 crore during plants life time. He said the Government should have gone for executing the project in state sector as suggested by the association.

The PSEB Engineers Association in its letter to Chief Minister earlier this week had pointed out that the poor track record of Lanco in executing projects. The firm submitted offer for supply of power to Haryana at price of Rs.2.35 paise per unit but later backed and Haryana forfeited the security deposit of Rs.12 crores. Further 300 MW Amarkankat unit no. 1 and 2 in Madhya Pardesh are also under litigation with Madhya Pardesh and Haryana Governments who had entered in to a contract with Lanco. The same is the fate of Annapara III in UP and Udipi project in Karnatka.

The Association is still of view that with all the clearances taken for the project PSEB can complete the project with in a period of 42 months. PSEB has been spending hundreds of crore on power purchase every year, it can arrange 300 crore every year to execute the project in state sector. .