JOIN USThe Himachal Pradesh government on Tuesday decided to go for re-bidding of a multi-million dollar hydropower project, which is currently under litigation between the Netherlands-based Brakel Corporation and Anil Ambani-led Reliance Infrastructure.
The cabinet, presided over by chief minister Virbhadra Singh, also decided to reject the representation of both companies to re-allot the 960-MW Thopan-Powari-Jangi project in Kinnaur district to them, a government spokesperson said.
Brakel had challenged in the Supreme Court an earlier ruling of the Himachal Pradesh High Court, which on October 7, 2009, ordered cancellation of the allotment of the project to it on a petition filed by Reliance Infrastructure, one of the bidders.
“We allow the writ petition and quash the decision of the council of ministers dated November 25, 2008, as being arbitrary, illegal and irrational,” the HC had said.
Subsequently, the state government decided to invite fresh bids for the project. It even decided to forfeit the company’s upfront premium of Rs 280.69 crore deposited with the government.
The state government had signed an agreement with Brakel in 2008, two years after the project was awarded to the Dutch company, for starting pre-construction activities. The government was entitled to get 12 per cent free power from Brakel.
The project requires an investment of more than $1,300 million. The spokesperson said the government will now go for fresh bidding as per state’s amended power policy in 2008.
Under the new policy, the bidder who offers more free power to the state in addition to the fixed quota will be allotted the project. The fixed quota is 12 per cent free power for the first 12 years, 18 per cent up to 30 years, and 30 per cent up to 40 years.
After 40 years, the project will be handed over to the government. The free power bidding is in addition to the fixed upfront premium of Rs 2 million per megawatt.
Official sources said the delay in the project is costing Rs 250 crore annually to the state government. This amount could be earned by the government by selling 450 million units provided free by the company.
Assessment
A recent assessment done by the State Infrastructure Development Board to evaluate the loss to the government due to delay in commissioning the project was around Rs 1,400 crore, an official said.
The Thopan-Powari-Jangi hydropower project aims to generate 4,000 million units per year.
HP has abundant water resources, with five major rivers flowing down the slopes of the Himalayas. The state’s power generation potential is 23,560 MW, about 25 per cent of India’s total hydropower potential.