Himachal Pradesh Cabinet allots 960 Mega Watt Powari Hydel Power Project to Reliance Energy

By:Himvani

Himachal Pradesh Cabinet has agreed to allot 960 Mega Watt Jhangi-Thopan-Powari Hydel Project to M/S Reliance Energy Limited.

The State Cabinet met here today and presided by Chief Minister Mr. Virbhadra Singh decided to allot 960 Mega Watt power project to M/s Reliance Energy Limited. The cabinet note that has been approved says that if firm does not accept the offer the project may be advertised a fresh for biding.

The Cabinet also approved allotment of 217 mini and micro hydel projects up to 5 MW capacity and restoration of Chahod (2MW) hydel project in district Mandi. Jhangi-Thopan-Powari Hydel Project  was in limbo for last few years as multi-million dollar hydropower project was under litigation with Reliance Infrastructure and has unsettled financial issues with the previous bidder, the Netherlands-based Brakel Corporation in the Supreme court.

The project was allotted to Brakel in 2008 but the Himachal Pradesh High Court annulled it on October 07, 2009, on a plea by Reliance Infrastructure, which was one of the bidders. Brakel moved to Supreme Court but withdrew to pursue remedies suggested by the high court in its order. The High Court wanted the state government to take a “fresh decision as to whether it wants to re-advertise the project or wants to act on the basis of the old tender.

Reliance Infrastructure alleged that the state failed to resolve the issues: Forfeiture of the company’s up-front premium of Rupees 280.69 crore (USD 46.78 million) and the damages of Rupees 2,717 crore levied on it for causing a loss to the state exchequer by delaying the project. Adani Power, which was included as a consortium partner in the project, had deposited the upfront premium.

The state government 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 for the project. The government, as per the pact, was entitled to get from Brakel 12 percent free power for first 12 years, 18 percent up to 30 years, and 30 percent up to 40 years. The government would have earned Rupees 250 crore annually by selling free power.

The Thopan-Powari-Jangi hydropower project, one of the most viable ones, requires an investment of over Rupees 7,000 crore and aims to generate 4,000 million units per year. It was to be commissioned by 2017 and it would require another nine years for the project to go on stream.

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