Ernst & Young (E&Y), the financial consultant to the 4,000 MW Sasan Ultra Mega Power project in Madhya Pradesh, has recommended that the award to the Lanco-Globeleq combine (now Lanco-Jindal) be cancelled and fresh bids be invited.

The consultants have told the Power Finance Corporation, the nodal agency for implementing the project, that Globeleq of Singapore had misrepresented financial and technical details.

It is learnt that all the bidders were required to submit details such as capacity and surplus cash flow of the companies participating in the bid. This included subsidiaries and associate companies in which they own 25 per cent or more. This information is to be certified by the board of directors and a chartered accountant. The Lanco-Globeleq bid was accepted because it was signed by the board of Globeleq Singapore and a chartered accountant.

E&Y's recommendation is similar to those of bankers and officials who have suggested re-bids by unsuccessful bidders in the light of irregularities in the original bid made by the Lanco-Globeleq consortium. Crucially, E&Y's advice for re-bidding comes even as the second-best bidder - Reliance Energy - is learnt to have told the government that it automatically qualifies to bag the project.

Also See:

PFC puts Sasan Power transfer on hold (27-Feb-07)

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