Himachal serves notice to Brakel on power project deal

July 25th, 2008 - 3:31 pm ICT by IANS  

A file-photo of Bharatiya Janata Party
By Vishal Gulati
Shimla, July 25 (IANS) After dilly dallying for more than a fortnight, the Himachal Pradesh government has finally served show-cause notice to Brakel Corp NV of Netherlands asking why a multimillion dollar hydro power project contract awarded to it should not be cancelled, a government official said Friday. The 12-page notice, signed by the special secretary (power) and dated July 19, has asked the company to explain why the allotment of the Thopan-Powari-Jangi hydro power project in Kinnaur district, 300 km from here, to the company should not be cancelled.

The decision to issue the notice to Brakel was taken by the state cabinet at its meeting July 7.

The notice cited vigilance probes, which had raised serious doubts about the capabilities of the company to execute the project that requires an investment of more than Rs.40 billion.

Sources in the state power department told IANS that the government has observed that Brakel had got the project allotted by misrepresentation of its technical and financial strengths.

The government also took serious note of the decision of Brakel to transfer 49 percent equity in the company in the name of Gujarat-based Adani Power Ltd without the approval of the state government.

Moreover, it had floated a new company, Brakel Kinnaur Power Private Ltd, last year to develop the project without informing the government.

Before taking any decision, the government has set up a two-member ministerial committee comprising forest minister J.P. Nadda and health minister Rajeev Bindal to look into the affairs of Brakel.

Meanwhile, leader of opposition Vidya Stokes, who was the power minister when the project was allotted Dec 1, 2006, told IANS that there was no scope for any irregularity as the project was awarded on the basis of global tenders.

She accused the state government of ‘mishandling’ the Brakel issue.

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 project to Brakel, which made an upfront payment of Rs.1.95 billion along with interest.

Meanwhile, B.R. Gautam, the company’s top official in Shimla, said the company had clarified its financial status and credentials to the government a number of times.

In a missive to the government this month, the company has again clarified that it was fully ready to execute the project.

The company has even provided letters to the government written by its consortium, including Standard Chartered Bank, Halcrow, Energy Infrastructures Overseas Ltd and Eco Securities, confirming their equity participation in the project.

He said Brakel had already started pre-construction activities at the site after completing topographical surveys.

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