India’s Jindal Steel goes to court over Nepal hydel project

April 6th, 2008 - 11:36 am ICT by admin  

By Sudeshna Sarkar
Kathmandu, April 6 (IANS) Nepal’s hydro-power sector, mired in allegations of corruption, is caught up in a legal tangle as an Indian firm has filed a case in the Supreme Court here against an Indian public sector undertaking that outbid it. Indian business group Jindal Steel has gone to court over the 402 MW Arun III hydropower project that was recently awarded to the Sutlej Jal Vidyut Nigam, in which India’s Himachal Pradesh government has a stake along with the Indian government.

Sutlej and Jindal were among the nine companies that had bid for the project with the Indian PSU finally wrapping up the contract after almost three months of negotiations.

In the beginning, Sutlej had offered to give Nepal 4.5 percent free energy but later hiked it up to nearly 22 percent.

Since cash-starved Nepal’s cabinet said it would give three hydel projects in the pipeline to the bidders who offered the highest amount of free energy, Jindal is questioning the decision to award the contract to Sutlej since its own initial offer was 21 percent free energy.

In its petition in Nepal’s Supreme Court, Jindal Steel says that though the parliamentary committee which oversees natural resources-related projects in Nepal had directed the government to make the 21 percent free energy offer the ground for awarding the contract, the Nepal government failed to initiate any dialogue with it.

Jindal has also questioned the committee formed by the Nepal government in the past under a former finance secretary to evaluate the bids for the Arun III project.

It has asked for a stay on the awarding of the contract to Sutlej as well as an order to include it in the selection process.

Responding to the petition, the apex court has asked the government to appear before it on April 23 and show cause why the contract was awarded to the Indian PSU.

This is the second petition in the Supreme Court involving Arun III.

Last month, a group of Nepalis filed public interest litigation (PIL) against the award of the contract to Sutlej.

The petitioners are urging the court to order the government to discuss the project in parliament first since it relates to Nepal’s natural resources.

The PIL says the contract can be awarded only after two-thirds of the MPs approve of it.

The Maoists have also opposed the contract, saying such issues of national importance should be decided only after the crucial constituent assembly elections, scheduled for April 10.

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