Rajpura power project: L&T is lowest bidder

To be formally awarded project by next week

Engineering giant Larsen and Toubro (L&T) on Monday submitted the lowest bid for the state's 1,320 MW Rajpura thermal power project. L&T's bid was Rs 2.89 per unit, followed by that of Welspun Urja India Ltd at Rs 2.94 per unit as levelised tariff. The letter of intent will be given to L&T next week after getting approval from the board of the PSEB.

There were six bidders in all for the 1,320-MW project, which was put up for for re-bidding by the Punjab State Electricity Board (PSEB). The other four bidders were Lanco Infra, Adani Power, GMR and JSW Power.

In the last bidding, which suffered due to the global economic meltdown, Lanco Infra had emerged as the lone bidder for the plant, offering a rate of Rs 3.38 per unit, brought down to Rs 3.3 per unit after renegotiations. Their bid was, however, rejected by the Punjab State Electricity Regulatory Commission (PSERC) for the very fact that they were the lone bidder. The PSEB was directed by the Commission to put up the project for re-bidding.

The plant has two units of 660 MW each and has been awarded to L&T on a Build, Own and Operate (BOO) basis, which will supply power from the project to PSEB for the next 25 years.

L&T's bid is at the same level as that of Vedanta group, which bagged the 1,980 MW Talwandi Sabo thermal power project about two years ago at the rate of Rs 2.86 per unit of power. Experts say the rate of Rs 2.89 per unit for the Rajpura project is lower than that for the Talwandi Sabo power project if the cost escalation factor is taken into account.

A PSEB official, meanwhile, said if one considers the freight escalation factor according to the latest Union power ministry norms, the bid of Rs 2.89 per unit by L&T turns out lower by 55 paisa from the previous bid of Rs 3.3 per unit by Lanco for the same project. The board would save at least Rs 450 crore annually due to re-bidding of the Rajpura project. PSEB is also hoping that with L&T bagging the project, there would be no delay in the setting up of the project as the company is considered financially and technically sound.

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