Differing opinion on viability derailed hydro-electric project

The Directorate of Energy maintains that the upfront premium of the SELI Hydro Electric Power Company Limited was forfeited as the government was not satisfied with its contention that the project had become financially unviable.

“The project had not reached the stage where the question of viability could be decided. The Detailed Project Repot (DPR) was not ready when the company claimed that the project had become unviable and demanded the return of upfront premium of Rs 64 crore,” said Harikesh Meena, who has the additional charge of Director, Directorate of Energy.

The company had informed the Directorate of Energy of it decision to surrender the project and demand the return of upfront premium on August 14, 2017 on the grounds that the project was not techno-economically viable. In response, the Directorate of Energy cancelled the Letter of Award on September 23, 2017, and forfeited the upfront premium. The decision triggered a legal battle between the government and the company, leading to High Court’s decision on Monday to attach Himachal Bhawan in Delhi.

The government had invited bids in 2008 for constructing a 320 MW Hydro Electric Project in Lahaul and Spiti, on “build, own, operate and transfer basis”. Following the bidding, the project was awarded to the company, which paid the upfront premium of Rs 64 crore on July 20, 2009.

The project ran into rough whether in 2014 when the company started apprising the government of various impediments it was facing in implementing the project. From this stage, the project went downhill, eventually leading to the company surrendering the project and the government forfeiting the upfront premium.

Jagat Singh Negi, meanwhile, slammed the BJP, especially the Leader of Opposition Jai Ram Thakur, for their reaction on the High Court order. “The project was awarded under the BJP government in 2009. And Jai Ram Thakur was the Chief Minister in the previous BJP government. So, why he did not sort out the matter during his tenure?” said Negi, adding that the government will do whatever needs to be done to protect the interests of the state.

Project awarded under BJP govt

The project was awarded under the BJP government in 2009. And Jai Ram Thakur was the Chief Minister in the previous BJP government. So, why he did not sort out the matter during his tenure? The government will do whatever needs to be done to protect the interests of the state. — Jagat Singh Negi, Revenue Minister