SPECIAL REPORT | himachal pradesh | brakel scam
The unholy nexus between the Chief Minister and a Gujarat-based industrialist has created a stir in the hill state
by N N DHIMAN
HIMACHAL Pradesh is being rocked by scandalous allegations of illegal favours given by Chief minister Prem Kumar Dhumal to Gautam Adani. The Gujarati business tycoon, whose proximity to Gujarat Chief Minister Narendra Modi is no secret, has in the recent past used his political clout to bag some major infrastructure contracts. It was Modi who introduced Adani to Dhumal and put in a good word for him.
Such is Adani’s clout in the BJP that, despite the State vigilance department highlighting the nexus between the industrialist, State government officials and Netherlands-based firm Brakel in the allotment of two mega power projects in Himachal Pradesh – the Jhangi Thopan and Thopan Powari projects of 480 MW each – he still elicits strongly-worded support from the State BJP government. The vigilance department reported largescale irregularities in awarding the two power projects to a consortium led by Brakel Corporation NV – which was a front company of the Adani Group. The IT department investigation found that Brakel had no past experience in execution of power projects, and both companies lacked the financial strength to bid for the Rs 6,000-crore projects and execute them. The companies existed only on paper. A subsequent report by then Power Secretary Ajay Mittal also found glaring irregularities in the allotment of the projects to Brakel. But the Dhumal government steamrollered all these reports and went ahead with the allotment in October 2005.
Later, after a High Court judgement, the allotment was cancelled. But the Dhumal government did not initiate any action against Adani. Meanwhile, implementation of the projects has been delayed by almost five years. The Director, Energy, and Secretary, Law, of the HP government have reported that the State has suffered revenue loss of over Rs 931.25 crore due to the delay in implementation of these two power projects.
In October 2005, the Himachal Pradesh government initiated the bidding process for selection of developers for various hydro projects, including Jhangi Thopan (480 MW), Thopan Powari (480 MW) and Kutehr (260 MW). Brakel emerged the top-ranked bidder with Reliance second for both Jhangi Thopan and Thopan Powari while in the case of Kutehr it was DSC Himal and JSW Energy who were number one and two, respectively. The successful bidders were required to deposit 50 per cent of the premium amount quoted in the bid immediately after issue of LOIs. But Brakel and DSC Himal failed to make the payment despite show cause notices issued by the State government. In July 2007, the State government cancelled the allotment of the Kutehr project to DSC Himal but decided to give Brakel more time. To avoid delay in project implementation, the government also decided to allot the Kutehr project to JSW Energy, who offered to match the DSC Himal bid, instead of floating another tender.
Brakel failed to deposit the amount despite another show cause notice. The government still did not cancel the allotment. In the meantime, the state vigilance dept, IT dept and the Power Secretary submitted their damning reports. The vigilance department found that infirmities were created in the bid document, whereby the lead member of a consortium was not required to have any substantial financial standing. Hence, financial marks were awarded to Brakel on the strength of Standard Bank, one of the partners in the consortium. But there was no definite commitment of equity participation by Standard Bank. The very basis of the assessment of Brakel’s financial strength was wholly without evidence. None of the other consortium members had committed any specific equity participation and since Brakel itself had no equity, no marks should have been awarded to it for financial strength.
Brakel finally paid the upfront premium of Rs 173 crore. This sum allegedly came from the Adani Group. The latter has over 250 cases pending against it with Customs, Income Tax, Excise DRI and the CBI. It never committed to becoming a member of the consortium and initially was not shown as one. Notwithstanding the findings of vigilance and tax investigators, a State government committee headed by Chief Secretary Asha Swaroop suggested the go-ahead for the allotment of the two projects to Brakel.
Finally, it was due to the intervention of the High Court that the allotment was cancelled. The court also ordered forfeit of the deposit money amounting to Rs 280 crore for causing loss to the state exchequer due to the delay in implementation of the projects.
Brakel went to the Supreme Court, challenging the cancellation and seeking re-allotment of the projects. The matter is still pending in the Supreme Court. Shockingly, the Dhumal government is still protecting the Adani Group and has justified the allotment of the projects to Brakel in its recently filed affidavit in the case. The government has even justified the financial help extended by Adani to Brakel, saying any company is free to take loans from anywhere.
HIMACHAL Pradesh is being rocked by scandalous allegations of illegal favours given by Chief minister Prem Kumar Dhumal to Gautam Adani. The Gujarati business tycoon, whose proximity to Gujarat Chief Minister Narendra Modi is no secret, has in the recent past used his political clout to bag some major infrastructure contracts. It was Modi who introduced Adani to Dhumal and put in a good word for him.
Such is Adani’s clout in the BJP that, despite the State vigilance department highlighting the nexus between the industrialist, State government officials and Netherlands-based firm Brakel in the allotment of two mega power projects in Himachal Pradesh – the Jhangi Thopan and Thopan Powari projects of 480 MW each – he still elicits strongly-worded support from the State BJP government. The vigilance department reported largescale irregularities in awarding the two power projects to a consortium led by Brakel Corporation NV – which was a front company of the Adani Group. The IT department investigation found that Brakel had no past experience in execution of power projects, and both companies lacked the financial strength to bid for the Rs 6,000-crore projects and execute them. The companies existed only on paper. A subsequent report by then Power Secretary Ajay Mittal also found glaring irregularities in the allotment of the projects to Brakel. But the Dhumal government steamrollered all these reports and went ahead with the allotment in October 2005.Notwithstanding the findings of vigilance and tax investigators, a State government committee headed by Chief Secretary Asha Swaroop (left) suggested the go-ahead for the allotment of the two projects.
Later, after a High Court judgement, the allotment was cancelled. But the Dhumal government did not initiate any action against Adani. Meanwhile, implementation of the projects has been delayed by almost five years. The Director, Energy, and Secretary, Law, of the HP government have reported that the State has suffered revenue loss of over Rs 931.25 crore due to the delay in implementation of these two power projects.
In October 2005, the Himachal Pradesh government initiated the bidding process for selection of developers for various hydro projects, including Jhangi Thopan (480 MW), Thopan Powari (480 MW) and Kutehr (260 MW). Brakel emerged the top-ranked bidder with Reliance second for both Jhangi Thopan and Thopan Powari while in the case of Kutehr it was DSC Himal and JSW Energy who were number one and two, respectively. The successful bidders were required to deposit 50 per cent of the premium amount quoted in the bid immediately after issue of LOIs. But Brakel and DSC Himal failed to make the payment despite show cause notices issued by the State government. In July 2007, the State government cancelled the allotment of the Kutehr project to DSC Himal but decided to give Brakel more time. To avoid delay in project implementation, the government also decided to allot the Kutehr project to JSW Energy, who offered to match the DSC Himal bid, instead of floating another tender.
The vigilance department reported largescale irregularities in awarding the two power projects to a consortium led by Brakel Corporation NV – which was a front company of the Adani Group.
Brakel failed to deposit the amount despite another show cause notice. The government still did not cancel the allotment. In the meantime, the state vigilance dept, IT dept and the Power Secretary submitted their damning reports. The vigilance department found that infirmities were created in the bid document, whereby the lead member of a consortium was not required to have any substantial financial standing. Hence, financial marks were awarded to Brakel on the strength of Standard Bank, one of the partners in the consortium. But there was no definite commitment of equity participation by Standard Bank. The very basis of the assessment of Brakel’s financial strength was wholly without evidence. None of the other consortium members had committed any specific equity participation and since Brakel itself had no equity, no marks should have been awarded to it for financial strength.Brakel finally paid the upfront premium of Rs 173 crore. This sum allegedly came from the Adani Group. The latter has over 250 cases pending against it with Customs, Income Tax, Excise DRI and the CBI. It never committed to becoming a member of the consortium and initially was not shown as one. Notwithstanding the findings of vigilance and tax investigators, a State government committee headed by Chief Secretary Asha Swaroop suggested the go-ahead for the allotment of the two projects to Brakel.
After a High Court judgement, the allotment was cancelled. But the Dhumal government did not initiate action against Adani. Meanwhile, implementation of the projects has been delayed for five years.
Finally, it was due to the intervention of the High Court that the allotment was cancelled. The court also ordered forfeit of the deposit money amounting to Rs 280 crore for causing loss to the state exchequer due to the delay in implementation of the projects.
Brakel went to the Supreme Court, challenging the cancellation and seeking re-allotment of the projects. The matter is still pending in the Supreme Court. Shockingly, the Dhumal government is still protecting the Adani Group and has justified the allotment of the projects to Brakel in its recently filed affidavit in the case. The government has even justified the financial help extended by Adani to Brakel, saying any company is free to take loans from anywhere. 
No comments:
Post a Comment