Thaindian News

Gandhinagar, Feb 10 (IANS) The opposition Congress in Gujarat Wednesday accused the state government of a Rs.14,296 crore scam, claiming it had under-valued its stake while divesting state-run Gujarat Pipavav Power Company Ltd (GPPC).
“The government, which sold its 49 percent stake in the GPCC, had valued its holding at just Rs.381 crore,” Leader of Opposition in the state assembly Shaktisinh Gohil told reporters in Ahmedabad.

The GPCC is a subsidiary of state public sector undertaking Gujarat State Petroleum Corp (GSPC).

“It is worth noting that the state government preferred to divest its interests from GPPC ahead of proposed IPO of GSPC,” Gohil added.

Gohil alleged that it was a “dishonest deal” since it values GPPC at only about Rs.778 crore even as it is commissioning 702 MW of gas based power generation capacity and plans to ramp up this capacity to 1050 MW subsequently.

Besides, GPPC has been roped in by the state government to convert three of its power plants from coal to gas and garner precious carbon credit.

Gohil said that the “dubiousness” of the deal is evident from the fact that the state government-promoted listed company, Gujarat Industries Power Company Limited (GIPC), is valued at over Rs 1,500 crore. And this despite GIPC having installed generation capacity of just 560 MW.

Interestingly, Swan Energy with 49 percent of equity in GPPC will get rights for over 70 percent of the carbon credit as per the agreement with the GSPC.

All this has been offered to Swan Energy in what the opposition leader termed as a “covert” deal without inviting competitive bids from much more eligible entities with proven track record engaged in power sector.

Gohil also alleged that the deal was inked in a “hush hush manner” before its parent company made its debut at the stock markets.

“This political decision which smacks of corruption has been done to avoid public glare and stakeholders’ scrutiny,” he added.

“The annual results of Swan Energy available in the public domain show that it has suffered operating losses from 2005 to 2008, has no material consumption in 2008 and 2007, and has material consumption of less than an average of Rs 1 crore in 2005, 2006 and 2005, reports no payment of salaries and wages in the years 2005, 2006 and 2007 and 2008, while it has a modest outgo of Rs.12 lakh in 2009, has not paid any excise duties from 2005 onwards but has huge ‘other expenses’,” Gohil underlined.

“All these indicate that the financial records of the company are nothing but forgeries and made up,” he charged.

The leader of the opposition also alleged that the “hithertho unknown Swan Energy did not have the capacity to pay for 49 percent equity of the GPPC and need to raise funds purely on the basis of windfall it expects from the largesse bestowed by the state government through virtual grant of free equity in one of its blue chip companies and the huge recurring and undeserved income it will get through the unwarranted grant of 70 percent of the carbon credits accruing to GPPC,” he added.

Gohil claimed this decision of the government is likely to cost the state exchequer Rs.14,296 crore over the next 10 years.

“Besides, Gujarat chief minister, the Chief Minister’s Office, energy department and GSPC officials are involved in this murky operation of giving away Gujarat’s public wealth to a private player,” he alleged.