Ernst & Young, consultants to the government for the first two ultra mega power projects (UMPP) at Sasan and Mundra, has officially found the Globeleq Singapore’s bid for Sasan invalid because it did not meet the required bidding parameters, according to a ET report.

The E&Y report said, “...Globeleq Ltd has stated that it has no connection with Sasan UMPP.” Enquiries were made by E&Y while preparing the report on validity of the bids. The parent company’s view comes despite a counter-claim by its subsidiary in a letter dated April 3, 2007, that “it has relied on the credentials of Globeleq Ltd”.

The consultants, who were asked by Power Finance Corporation (PFC) to submit a report following a controversy over the Globeleq-Lanco bid, has said that Globeleq Ltd, the parent company of Globeleq Singapore, has held no responsibility for its subsidiary for its commitment to the Sasan power project.

The report comes at a time when the empowered group of ministers (EGoM) is deliberating on ultra mega projects and is expected to decide the fate of the Sasan power project. E&Y has held the winning consortium did not meet the requirements of Clause 2.1.4 of the RFQ.

The finding by the consultant comes in the background of the view held by attorney-general Milon Banerjee that “change in membership of the consortium much after the bid deadline was over is not permissible under the terms of the bid document”.

The bidding norms (3.3.4) required parent companies to provide legally-binding resolutions if the subsidiary draws on the credentials of the holding company to qualify for the bid. Globeleq Singapore did not fulfil either the technical or the financial parameters on its own to bid for the project.

Globeleq Singapore has since changed hands with Globeleq Ltd selling off the company to the Lanco-Jindal Steel & Power consortium. The EGoM on UMPPs, which met on Wednesday, failed to take a decision on the Sasan project. It would meet again on Thursday to find a solution to the controversial project.

The bid validity extension expires on July 5. Along with Lanco Infratech, three companies, Reliance Energy, Jaiprakash Associates and NTPC, have chosen to extend their bids.