How to litigate a project to death

Simultaneously, the Union Power Ministry has initiated an exercise to decide whether or not the PPA needs to be re-opened. For one, after 1997, costs of power equipment have fluctuated wildly, going first down and now up. Somers, however, points out that they had asked for a cost escalation of Rs 70 crore in December 1997, but their request was turned down because the PPA had been sealed. So how could it be re-opened now?

Another issue is that of the`heat rate’ in June 1998, a notificatiion was issued to lower the tariff payable to projects like the one at Mangalore, but a month later another notification was issued saying this would not apply to PPAs signed earlier. The Mangalore Power Company’s PPA falls in this category.

With the project stuck for well over seven years now, first due to bureaucratic delays and then as a result of public interest litigations in over-crowded courts, it’s hardly surprising that both the project’s promoters are unwilling to tolerate any more delays.

The MoU for the 1,000 MW coal-based power plant half-way between Udupi and Mangalore was signed between the Karnataka Government and Cogentrix in July 1992. By the next year, the Centre had fast-tracked the project along with seven others and promised to extend counter-guarantees.

So far so good. The next two years, fast track notwithstanding, went in getting a host of other clearances including the ones from the Foreign Investment Promotion Board and the KarnatakaState Pollution Control Board, paving the way for in-principle clearance by the Central Electricity Authority on July 27, 1995. Another year was spent getting other clearances such as the environmental one (June 1996), and the Union government’s counter-guarantee (Oct 1996).

After this, the litigations began. Enter Maneka Gandhi. On September 11, 1996, the Enviro-Legal Action Committee and others filed a public interest suit before the Supreme Court alleging environmental degradation and requested the apex court to set aside the environmental clearance. The case was referred to the High Court of Karnataka after review by NEERI.

Based on the study by NEERI, Maneka Gandhi alleged that that the power plant was violating the Coastal Regulatory Zone (CRZ) which does not allow plants to be set up within 500 metres of the coast.

But the Karnataka High Court finally dismissed the plea on August 29, 1997 as it found the NEERI report to be not too convincing. By then, Cogentrix had lost Rs 1 crore in legal feesand, of course, precious time.

Meanwhile, in April, 1997 a PIL had been filed in the Karnataka High Court by Arun Kumar Agrawal and S.K. Kantha, alleging payment of bribes to the tune Rs 60 cr.

Next year, even before the allegations of corruption could be looked into, came another irritant. The Jana Jagruthri Samithi of Nandikur appealed to the Supreme Court against the High Court ruling on the environment clearance. But on February 3, 1998, the Supreme Court dismissed it and upheld the eco-clearance.

On February 27, a Division Bench of the Karnataka High Court passed a judgement ordering the state to file an FIR leading to a CBI inquiry into the project. But on April 3, 1998, the apex court stayed this judgement. It finished its hearings in January, 1999, but delivered its judgement clearing the promoters only on December 13.

Understandably, both the central as well as the state governments are thrilled with the Court’s judgement. However, as Cogentrix’s Ron Somers has made clear, after seven yearsof tribulations, it is up to the State to demonstrate that it means business: "It is now the government’s turn to demonstrate follow-through and commitment." As for opening up the PPA, and changing terms now, Somers says, "We can’t keep moving the goal-post."