Lanco Infratech hopes to revive Gujarat EPC deal

Lanco Infratech Ltd expects to revive its Rs 3,294-crore engineering, procurement and construction (EPC) contract with Gujarat Industries Power Company Ltd (GIPCL) after the conclusion of a corporate debt restructuring (CDR) exercise by its the holding entity, expected by the month-end.

On Friday, in a statement to stock exchanges, GIPCL had announced that it had cancelled Letters of Intent issued to Lanco Infratech for EPC contracts as the latter had violated the EPC tender conditions. The contracts were for two 300 MW lignite-based power plants.

Lanco Infratech says it has initiated a debt restructuring exercise with a consortium of banks led by IDBI. This had delayed the issue of a performance guarantee, which was required for the Gujarat project.

Speaking to

Business Line, T. Adibabu, Chief Operating Officer, Finance, said: “The CDR process for the holding company was on. Banks do not lend during this period. Therefore, to a notice sent earlier this month, we had mentioned the CDR package and that the process would be concluded by month-end. Once this is concluded, the necessary guarantee would be provided.”

“Based on this assurance, the company agreed and we are confident that the project will be handed over to us. They also realise that a fresh tender would mean a delay of at least 6-9 months,” he added.

GIPCL had awarded the contract to Lanco Infratech in June 2013. The Lanco EPC arm was expected to implement the project near Dungri in Surat district, adjacent to the existing Surat Lignite Power Plant (SLPP), by the end of the third quarter of financial year 2016-17.

> rishikumar.vundi@thehindu.co.in