Shimla: Looking to raise some quick cash for meeting mounting salary-pension bills, interest payments and other committed liabilities, the Himachal Pradesh government quietly made changes to power project allotment policy by reverting to upfront bidding even as it contemplates starting online lotteries.
Abandoning the free power bidding procedure, a cabinet meeting presided over by chief minister Virbhadra Singh on 24th July approved putting 37 hydro power projects out for auction where the hydro site would be offered to the highest bidder who has the capacity to make the highest upfront payment.
“There is a policy change in the bidding process for allotting hydro power project sites,” said SKBS Negi, principal secretary power let Hill Post know. “We have reverted to the old method of offering the project site to the highest bidder on upfront payment basis,” he said.
Bidding to made on per MW of energy potential at any given site, the base price has been raised from Rs 20 lakh to Rs 35 lakh per MW. Talking to reporters, the chief minister said, “the raise was long due.”
The upfront payment policy, introduced in December 2006, had by July 2009 fetched the government Rs 665.85 crores in ready cash in allotment of 15 medium and large projects and 293 small hydro project.
Tweaking the policy introduced by Virbhadra Singh in 2006 in his previous term, the BJP government led by Prem Kumar Dhumal led BJP in 2008 had changed the terms by fixing Rs 20 lakh per MW as upfront payment and the auction was decided on the basis of whoever offered the highest percentage of free power to the state.
“With power companies finding it difficult to sell electricity on long term basis and front loading of project costs by down payment for securing a site is going to find few takers this time around,” said a HPSEB engineer, on conditions of anonymity.
With most viable hydropower potential sites on rivers and streams already sold out, a sharp drop in per unit electricity sale price has rendered many projects unviable and many companies who have been allotted power projects, have failed to achieve financial closures.
Moreover, many of the projects secured through international global bidding earlier such as the 960 MW Jangi-Thopan-Powari project for which more than Rs 200 crore’s of upfront money was collected by the government, stands cancelled and is again going to be put up for auction, said the engineer.
With the hill state reeling under an accumulate debt burden of over Rs 30,000 crore, the cash strapped government has reverted to the old policy hoping for easy money to sure up finances.
The state’s tax base unable to keep pace with runaway expenditure, the cabinet in its last meeting also deliberated upon starting lotteries for adding another revenue stream into the government exchequer.
Chief Minister Virbhadra Singh told reporters, “a decision is yet to be taken but a proposal is there for starting only online lotteries.”
The government had earlier banned lotteries in the state as a number of families were reported to have sunk into debt because of a family member getting addicted to gambling his luck with lotteries.
As Editor, Ravinder Makhaik leads the team of media professionals at Hill Post.
In a career spanning over two decades through all formats of journalism in Electronic, Print and Online Media, he brings with him enough experience to steer this platform. He lives in Shimla.
