Himachal Pradesh High Court dismisses Reliance Energy petition

Shimla, Oct 30 (IANS) The Himachal Pradesh High Court Thursday dismissed a petition by Reliance Energy for allocation of a hydropower project to it without inviting fresh bids if the existing contract, awarded to an overseas firm, was cancelled.

A division bench comprising Chief Justice Jagdish Bhalla and Justice Rajeev Sharma dismissed the Reliance Energy petition challenging a cabinet decision July 7 to invite bids once again in case the existing contract to Brakel Corp NV of Netherlands was cancelled.

With this, the government can re-invite bids for execution of the multi-million dollar Thopan-Powari-Jangi power project in Kinnaur district if the original contract is cancelled.

Earlier, the High Court had cleared legal hurdles for Brakel by dismissing a Reliance Energy petition challenging the allotment of the project to the Dutch firm.

The High Court had dismissed the petition as infructuous and observed that the court's intervention was not required at this point of time as the government had already started the process to review the allotment of the power project to Brakel.

However, uncertainty still looms large over the fate of the project, with the state government time and again asking Brakel to prove its credentials.

Executives of the Dutch hydropower major met Principal Power Secretary Ajay Mittal earlier this month to clarify the company's financial credentials that have been questioned.

Brakel said it was capable of completing the Rs.40-billion ($869 million) project by 2013.

However, the government is yet to sign the pre-implementation agreement, which is mandatory before beginning work on a project. In fact, it has despatched two show-cause notices to Brakel asking why its contract should not be scrapped.

The project was allotted to Brakel in December 2006 by the previous Congress government through open international bidding.

When the Bharatiya Janata Party (BJP) came to power this January, it awarded the same project to Brakel, which made an upfront payment of Rs.1.95 billion along with interest.

'There is apparently lack of clarity on the part of the government,' a senior bureaucrat remarked, on condition of anonymity.