NEW DELHI, DECEMBER 13: Four days after US major Cogentrix formally announced it was pulling out of its $1.3 bn Mangalore power project due to inordinate delays in the country's courts, a division bench of the Supreme Court today delivered its verdict completely absolving the power major of charges of cost-padding, bribery and kickbacks. With the Court ruling ending seven years of tribulations in various courts, including one year of waiting for a ruling in this court itself, the ground is now set for reviving the 1,000 MW project.Immediately after the Court's verdict setting aside the judgment of the Karnataka High Court which called for a CBI probe into the charges, Mangalore Power Company's chief Ron Somers said: ``We've informed China Light and Power of the Court's verdict but it's Sunday night in the US, so we haven't told Cogentrix's board. It's upto the two boards to decide.'' Cogentrix owns 60 per cent of the project, while the Hong Kong-based China Light owns the rest.Somers met Power MinisterKumaramangalam this evening, along with V P Sharma of China Light, to discuss how the project could be revived, just days after the promoters jointly decided to quit the country. Kumaramangalam told Somers and Sharma that within a week of Cogentrix and China Light giving him a letter stating that they were interested in developing the Mangalore project, he would move the Cabinet and issue the company a counter-guarantee.This would, however, be conditional on the Karnataka government and the State electricity board ratifying the company's power purchase agreement (PPA). This, Kumaramangalam said was because the company had signed its (third) and final PPA in November 1997, after which equipment prices had moved considerably, first lower and now higher.He said, however, that this would probably get done quickly since Karnataka Chief Minister S M Krishna had met him three weeks ago and had indicated that his State wanted the project to be cleared quickly. Power Ministry officials added that the KarnatakaElectricity Board was viable enough to be able to give an ``escrow'' facility to the Cogentrix project.An escrow facility blocks up the revenues received from consumers so that payments can be made to various suppliers first. To that extent, it serves to assure suppliers that they will be paid on time.Later, when quizzed as to how long it would take to get the necessary clearances from Karnataka, Somers said he didn't expect ratification of the PPA to be a big hurdle since prices were more or less where they were in 1997. As far as they were concerned, he added, the PPA had been frozen in 1997 itself.A division bench comprising Justice S Saghir Ahmad and S Rajendra Babu today allowed the appeal filed by Karnataka government, Karnataka Electricity Board and China Light & Power company while setting aside the high court order. Reacting to today's ruling, Somers said ``it vindicates what we have said from the very beginning, that the allegations against us are frivolous and baseless.''Between 1996and 1997, the Mangalore Power Company had fought and won 8 PILs against it on environment grounds but finally got tripped up in another PIL in 1998 which alleged kickbacks of HK $191mn, allegedly window-dressed as ``development costs''. The firm had, at that point replied, that of this only HK $71.8 mn had been spent on the Mangalore project, and the entire amount had been audited by Price Waterhouse Coopers.It had, however, lost this case when the Karnataka High Court asked for a CBI probe into these charges in February 1998. This was challenged in the Supreme Court, where the case was heard by January this year but the judgment was kept pending.Now, the red carpet
