The estimated Rs 16,000-crore project is expected to supply power to eight states: MP, Uttar Pradesh, Delhi, Haryana, Punjab, Rajasthan, Uttaranchal and Chhattisgarh.

The validity of the bids — there were nine in all — was supposed to expire today and has been extended by a month. The file buck will now be passed to another decision-making body, possibly a Group of Ministers or the inter-Ministerial Public Private Partnership Appraisal Committee.

Last December, after a year-long process, Lanco-Globeleq (Singapore) — a consortium of Andhra-based Lanco group whose chairman is Congress MP L Rajagopal and Globeleq, the Singapore-based arm of a UK power firm — was chosen based on its lowest tariff of Rs 1.196 per unit.

Anil Ambani’s Reliance Energy Limited ranked second with Rs 1.3 per unit. Other bidders (see box) included Jindal Power and Tata Power.

Lanco-Globeleq got the Letter of Intent (LoI) after being cleared by an evaluation committee, headed by HDFC chairman Deepak Parekh and including state and Ministry officials.

In February this year, within two months of winning the bid, the consortium changed hands with Globeleq, Singapore, being bought by an arm of Lanco and Jindal Power. Globeleq’s parent company distanced itself from the project.

Subsequently, Ernst & Young, the Ministry’s advisor on verifying the bidders’ qualifications, was asked to re-check Lanco-Globeleq’s bid. In April, Ernst & Young got back to Power Finance Corporation, the nodal agency for the project, claiming that Globeleq had misrepresented facts about the company.

When contacted, Lanco’s managing director Madhusudan Rao told The Indian Express: “We are confident that we have not violated any bid conditions.”

The file was then sent to the Law Ministry which was asked to clarify three key issues: can a change in holding of the parent company after the Letter of Intent is given lead to invalidation of the bid? Can the bid be annulled if infirmities are discovered after award of LoI? Can procurers, (or states) themselves cancel the deal? “The Law Ministry and Power Ministry have exchanged views,” is all an official is willing to say.

When asked why the LoI was issued and a second verification needed, Power Minister Sushilkumar Shinde told The Indian Express that “there are a lot of different versions (on the issue),” and that’s why it could be referred to a GoM.