Summary form only given. Optimal location and control of an unified power flow controller (UPFC) along with transformer taps are tuned with a view to simultaneously optimize the real power losses and voltage stability limit (VSL) of a mesh power network. This issue is formulated as a non-linear equality and inequality constrained optimization problem with an objective function incorporating both the real power loss and VSL. A new evolutionary algorithm known as bacteria foraging is applied for solving the multi-objective multi-variable problem, with the UPFC location, its series injected voltage and the transformer tap positions as the variables. For a single objective of only real power loss, the same problem is also solved with interior point successive linearization program (IPSLP) technique using the LINPROG command of MATLAB. A comparison between the two suggests the superiority of the proposed algorithm. A cost effectiveness analysis of UPFC installation vis-a-vis loss reduction is carried out to establish the benefit of investment in an UPFC.