Himachal to invite fresh bids for Thopan-Jangi hydro project

“It (Cabinet) decided to re-bid the Jangi-Thopan and Thopan-Powari Projects as a single project Jangi-Thopan-Powari of 960 MW capacity. This hydro electric project will be re-bid as per the new hydro policy. Cabinet also decided to reject the representation made by Brakel Corporation NV and Reliance ,” a press note issued by the government said.

The rebidding expected to benefit the state government almost by Rs 10,000 crore.

The multi-million dollar project is under litigation as the Himachal Pradesh High Court had ordered cancellation of allotment of the project to Brakel Corporation (in 2006) on a petition filed by Reliance in October 2009. An appeal filed by Brakel Corporation is pending in Supreme Court.

Subsequently,the state has decided to invite fresh bids for the project and forfeit the upfront premium money amounting Rs 280.69 crore (USD 60 million) deposited by the Dutch firm with the government for delaying implementation of the project.

However,the cabinet did not take any decision on power department’s proposal to impose a heavy penalty of Rs 1,365.86 crore on Brakel Corp.

The earlier BJP government in Himachal had signed an agreement with Brakel in 2008,two years after the project was awarded to the Dutch company,for starting the pre-construction activities. The BJP government too had filed its replies in the Supreme Court defending the allotment of project to Brakel,which is supported by Gujarat-based Adani group.

Reliance,a prominent bidder for the project,could not bag the project. However,after the change of the government,the company wrote a letter to Chief Minister Virbhadra Singh offering an out-of-court settlement and suggesting the government to allot the project to it as the company was willing to match the bid made by Brakel Corp.

“Had this been accepted,it would have caused a loss to nearly Rs 10,000 crore to the state exchequer,” a senior government official said.

The legal experts favoured rebidding under new power policy,under which the bids would be decided in favour of the bidder who offers higher percentage of free power to the state over and above the fixed free power quota which is 12 per cent for the first 12 years,18 per cent up to 30 years and 30 per cent up to 40 years.

After 40 years,the project will be handed over to the government. The free power bidding is in addition to the fixed upfront premium of Rs 2 million (Rs 20 lakh) per megawatt.

Official sources said the delay in the project is costing Rs 250 crore annually,which the state government would have earned from sale of 450 million units of free power provided by the Independent Power Producer (IPP).

As per a recent assessment worked out by the State Infrastructure Development Board (SIDB),the loss to the government due to delay in commissioning of the project was about Rs 1,400 crore.

With agencies