Reliance Energy takes Himachal government, Brakel to court

December 23rd, 2008 - 3:58 pm ICT by IANS  

Shimla, Dec 23 (IANS) Reliance Energy has once again moved the Himachal Pradesh High Court challenging the decision of the state government to allow Brakel Corp NV of the Netherlands to start work on a multi-million dollar hydropower project. The Thopan-Powari-Jangi hydropower project in Kinnaur district, about 300 km from here, was awarded to Brakel Dec 1, 2006 by the previous Congress government through open international bidding.

Taking up the petition, a division bench headed by Chief Justice Jagdish Bhalla Monday directed the government and Brakel to file replies and listed the matter for further hearing Jan 8, 2009.

This is for the third time that Reliance Energy, one of the bidders, has moved the high court since the allotment of the project in 2006.

Two earlier petitions by Reliance against the government had failed to provide any relief to the company.

The state government last month allowed Brakel, which had been accused of financial and technical incompetence, to begin construction of the project.

The government cleared the project on the recommendations of a high-level committee headed by Chief Secretary Asha Swaroop, which the cabinet constituted Nov 7 to give a final hearing to the company.

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. But the government did not sign the pre-implementation agreement with the company.

Later, the BJP government issued two show-cause notices to the company, citing vigilance probes that had raised doubts about the capabilities of the company to execute the project that requires an investment of more than Rs.40 billion ($869 million).

Two earlier Reliance Energy petitions - one for allocation of the project to it (Reliance) without inviting fresh bids if the existing contract, awarded to Brakel, was cancelled, and a second challenging the allotment of the project to the overseas firm - were dismissed by the High Court Oct 30 and July 31, respectively.

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