By bidding to supply power at a new low in tariff, Lanco Infratech bagged the project to build the 4,000 Mw ultra-mega power plant at Sasan in Madhya Pradesh while Tata Power won the bid to build a similar-sized plant at Mundra in Gujarat.
The winning tariff bid for the Sasan project, based on pithead coal, is Rs 1.196 per unit (average tariff) by Lanco with its British partner Globeleq while it is Rs 2.26 for Mundra, which is based on imported coal.
"The first year tariff for Sasan is about Rs 1 per unit while it is Rs 1.91 for Mundra," said Power Secretary RV Shahi.
The new lows are attributable to the economies of scale the country's largest projects will have. There is also the added advantage of the use of super-critical technology, which, compared with conventional boilers, can draw over 5 per cent more power from the same amount of coal.
"The benchmark price for pithead power is Rs 1.50-1.60 (from National Thermal Power Corporation). These bids vindicate the competitive bidding process," said Shahi.
The bid prices are also substantially lower than the price at which power is sold from another high-profile but jinxed project, Dabhol, now rechristened Ratnagiri Gas Power Project Ltd, which is selling power at Rs 5.01 per unit. Of course, this is not strictly comparable since the fuel in this case is naphtha, not coal.
While analysts termed the bids as aggressive, they also said the bids were realistic. "Otherwise the gap between the highest and the second highest bidder would not have been so narrow," they said. In the case of Sasan, for example, the second-best bid offering power at Rs 1.29 per unit was from Reliance Energy.
The surprise bid at Sasan was from NTPC, which was widely expected to be the most aggressive bidder. Its bid, however, topped Rs 2 per unit, which was much higher than the expectations of its parent ministry, too.
These projects involve an investment of Rs 16,000-20,000 crore each.
With the smooth take-off of these proof-of-concept projects, industry officials expect the other seven projects in the pipeline to also sail through. Work on inviting bids for the ultra-mega power project in Andhra Pradesh is already going on while Jharkhand is next in line.
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