Thaindian News

Shimla, April 5 (IANS) The Himachal Pradesh government is annually losing over Rs.100 crore in royalty as a multi-billion rupee hydropower project is caught in litigation.

“The delay of four and a half years in the commissioning of the 960 MW Thopan-Powari-Jangi hydropower project has caused a loss of approximately 2,332 million units so far,” Chief Minister Prem Kumar Dhumal said in a written reply in the assembly Tuesday.

The state government awarded the project to Dutch firm Brakel Corp Dec 1, 2006.

Officials of the state electricity department said the total financial loss to the government due to delay in the project commissioning is around Rs.500 crore.

The government, as per the agreement, is entitled to get 12 percent free power from Brakel. The project located in Kinnaur district requires an investment of Rs.6,000 crore.

The project is currently under litigation and the case has been listed for hearing in the Supreme Court April 18.

Brakel Corp had challenged the Himachal Pradesh High Court ruling of Oct 7, 2009, that ordered cancellation of the project allotment on a petition of Reliance Infrastructure, one of the bidders.

“We allow the writ petition and quash the decision of the council of ministers dated Nov 25, 2008, as being arbitrary, illegal and irrational,” the high court then said.

Subsequently, the state government decided to invite fresh bids for the project. It even decided to forfeit Brakel Corp’s upfront premium of Rs.280.69 crore ($60 million) deposited with the government because the company delayed the project work.

The state government signed an agreement with Brakel in 2008, two years after the project was awarded to the Dutch company, for starting pre-construction activities for the project. It was tentatively scheduled to be commissioned by 2017.