Shimla: After the Himachal High Court overturned an earlier cabinet decision about allotment of the 960 MW Jangi-Thopanp-Powari hydropower project, at its meeting today the cabinet decided to out rightly cancel the allotment, invite fresh bids for it and proposed to serve a notice on Brakel – the Dutch company that was allotted the project, for the revenue losses caused because of delays incurred.
Asha Swaroop, chief secretary at the cabinet briefing said, “The cabinet has accepted the High Court” decision and decided not to go in appeal in the case about allotment of the 960 MW Jangi-Thopanp-Powari project.
“The government would now allot it on the basis of re-bids, which would be tendered for it under terms of the new power policy,” she said.
The contentious project was allotted to Brakel in 2006 by inviting global bidding but the terms were altered after closure of the process by converting two 480 MW projects into a single project that was challenged by Reliance Infrastructure, who had failed to win the bidding process.
In response to a court order, the cabinet chaired by chief minister Prem Kumar Dhumal had decided to endorse the decision of allotment to Brakel taken by previous congress government, even after having instituted a inquiry into its allotment process and having served notices and collected Rs 173 crore upfront money and an additional Rs 20 crore as interest for delayed payment.
Reliance Infrastructure challenged the cabinet decision in court, which was struck down as ‘arbitrary, illegal and irrational’ on October 7.
The court in its order directed the State, “to take fresh decision as to whether it wants to re-advertise the said projects or it wants to act on the basis of the old tender within four weeks.”
Swaroop said the cabinet has decided not to return the Rs 193 crore which was collected as upfront money.
“It was decided to issue a notice to the company for the about three year delay caused to the project and the revenues losses incurred on account of it,” she said.
Handing over the project to state sector Himachal Pradesh Power Corporation Ltd (HPPCL) was considered by the cabinet but it was felt that the new corporation did not have the resources for executing such a large project.
Satluj Jal Vidyut Nigam (SJVN), the other public sector power generating company in the state was not considered, said the chief secretary.
The states new power policy entails a basic payment Rs 20 lakh upfront money for each MW of generation potential and the percentage quantum of free power offered by the bidding company to the government for allotment of the project.