Himachal Pradesh to issue show-cause notice to Brakel

October 22nd, 2009 - 8:48 pm ICT by IANS  

Bharatiya Janata Party Shimla, Oct 22 (IANS) The Himachal Pradesh government Thursday decided to invite fresh bids for a multi-million-dollar hydropower project and decided to issue a show-cause notice to Dutch firm Brakel Corp for causing financial loss to the state, a senior official said.
“The state cabinet Thursday decided to invite fresh bids for the 960 MW Thopan-Powari-Jangi hydropower project in Kinnaur district,” Chief Secretary Asha Swaroop told reporters here.

She said the cabinet has also decided to issue a show-cause notice to the company, saying: “Brakel is responsible for causing financial loss to the government by delaying the project.”

The Himachal Pradesh High Court Oct 7 cancelled the allotment of the project to Brakel on a petition filed by Reliance Infrastructure, one of the bidders that lost out to Brakel.

It later challenged the state government’s decision to allot the project to the Dutch firm.

The high court had also directed the state to take a decision on whether it wanted to invite fresh bids or it wanted to proceed on the basis of the old tender.

Regarding reverting to its earlier stand that favours the allotment of the project to Brakel, Swaroop said: “The company had got the project by misrepresentation of facts. Even the high court has taken a serious view in this regard. We will not move the Supreme Court against the decision of the high court.”

On the upfront premium of Rs.280 crore, including Rs.21 crore as delayed interest at the rate of 11 percent that Brakel deposited with the government, she said it would be refunded. “That amount would be adjusted as losses to the government.”

The state government had signed an agreement with Brakel Nov 25, 2008, two years after the project was awarded to the Dutch company, for starting the pre-construction activities for the project.

The project requires an investment of more than Rs.6,000 crore.

Meanwhile, Brakel has decided to file a special leave petition in the apex court against the high court decision.

“We are moving the apex court next week,” said Brakel executive B.R. Gautam.

The project was allotted to Brakel by the previous Congress government through global bidding in December 2006.

However, the incumbent Bharatiya Janata Party (BJP) government delayed signing the project agreement and even despatched two show-cause notices to Brakel asking why the company’s bid should not be scrapped.

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