Himachal issues show-cause notice to Brakel (Lead)

July 8th, 2008 - 12:12 am ICT by IANS  

A file-photo of Bharatiya Janata Party

Shimla, July 7 (IANS) The Himachal Pradesh government Monday issued a show-cause notice to Brakel Corp NV of the Netherlands, asking why its contract for two hydropower projects should not be cancelled. The state government asked Brakel to explain why the allotment of the 960 MW Thopan-Powari and Jangi-Thopan projects in Kinnaur district should not be cancelled and the upfront premium deposited by it forfeited, officials told IANS.

The state cabinet took a serious note of the company allegedly giving wrong information to the government regarding its financial and technical competence.

The officials said the government might invite fresh global bids for these projects.

However, the state vigilance bureau would continue with its investigations against Brakel.

In May the vigilance department questioned the Shimla-based representatives of Brakel.

The Rs.40 billion ($1 billion) projects were allotted to Brakel in 2006 by the previous government.

Last year, the Bharatiya Janata Party (BJP) - then in the opposition but now in power - had petitioned the governor, seeking a Central Bureau of Investigation (CBI) probe into the Brakel contract.

But when it came to power in January this year, the BJP awarded the same projects to Brakel, which made an upfront payment of Rs.1.73 billion.

Power company Reliance Energy has also moved the Himachal Pradesh High Court challenging the allotment of the two projects to Brakel.

The case is listed for hearing July 9.

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