Brakel Project – A Thorn In BJP Governments Flesh
Shimla: As lobbying for a mega 960 MW hydropower project intensifies, the government finds itself in a Catch-22 situation.
At one end it suspects the credentials of a multi-national consortium that has been allotted the project and at the same time has accepted Rs 200 crore as upfront money against the allotment.
“The cabinet will take a decision about the project,” said chief minister Prem Kumar Dhumal recently.
Reliance Energy, a rival bidding company that lost out the Jangi-Thopan and Thopan-Powari projects to a Dutch concern Brakel Corporation in competitive global bidding has taken the matter to court citing violations of projects allotment terms and seeking cancellation of the allotment. It seeks that the project be allotted to the second highest bidding company with a matching bid offer of the winner.
The cabinet meet is scheduled for Monday as the High Court has asked the government to stop dilly-dallying over the allotment process. The case comes up for hearing next week and the chief secretary has been directed to file an affidavit stating the government position on it.
Without indicating the government stand, the chief minister had said that he would not grant personal hearing to any company about the project allotment.
Reliable sources revealed that executives of both Reliance Energy and Adani Group of Companies, which is reported to have taken up a stake in Brakel Corporation, are resorting to intense lobbying to swing the cabinet decision in their favour.
In it all controversy over the project allotment to Brakel has become a thorn in the government’s flesh for when in opposition BJP had cast aspersion over the company’s antecedents and had demanded an inquiry in a charge sheet which it had submitted to the governor then.
On assuming power at the turn of the year, the BJP government served notice on the Dutch firm asking for immediate committed upfront payments, imposing market interest rates for delayed payments and demanding a change in arbitration terms in the agreement.
Agreeing to the governments’ conditions, the company paid up Rs 173 Cr as upfront money, Rs 20 crore as interest penalty and accepted the new terms in totto.
With the government having accepted the payments, it sought the courts directions for signing of the implementation agreement with Brakel in the case filed by Reliance Energy.
Competitive international bidding was invited for the twin 480 MW projects on Satluj River and the Dutch company Brakel Corporation won the bid hands down in 2006 by offering Rs 36 lakhs per megawatt of power potential as up front money.
Reliance Energy lost out by bidding Rs 30 lakh per MW for one project and Rs 20 lakh per MW for the second project. Experts maintain that Brakel by merging the two projects it had made it into one of the most viable hydro projects in upstream Satluj valley.