Shimla: Executives of Dutch hydro power major Brakel Corp NV, scheduled to set up the Thopan-Powari-Jangi power project in Himachal Pradesh, met the government over the weekend to clarify the company's financial credentials which have been questioned.

The officials met Principal Power Secretary Ajay Mittal Saturday to emphasise Brakel was capable of completing the Rs.40-billion ($869 million) project in Kinnaur district by 2013.

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 the company's bid should not be scrapped.

The Dutch firm, incidentally, has already paid Rs.1.95 billion along with interest to the state government.

"The meeting was held with the company officials at their request. Certain issues raised and the second show-cause notice were discussed," Mittal said.

"Still, the government is not satisfied on certain points, for which the company sought more time to provide additional inputs. I have given them a week's time."

Brakel executives said the company's move to float a new firm, Brakel Kinnaur Power Ltd (BKPL), to develop the project - which the government has questioned saying it had not been informed - was also discussed at the four-hour long meeting.

Brakel executives, citing several official documents, however argued the government has acknowledged the new company.

They cited, among others, a clearance report from the state irrigation and public health departments allowing BKPL water rights at the project site.

A senior Brakel official in Shimla said his company was confident of completing the project on schedule. "We are confident of completing the project by 2013. So far, we have spent Rs.215 crore (Rs.2.15 billion) on the project," he said.

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.

But subsequently, it issued the company two show-cause notices - the last one in July - asking it to explain why the allotment of the project should not be cancelled.

In its 3,000-page reply, the company had underscored its financial capabilities and sought a personal hearing with the principal power secretary.

 

Source : IANS