Corporates lock horns over Sikkim power projects

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GANGTOK, January 31:
Velankani Renewable Energy Private Limited and Tata Power – two corporate giants are in a tug of war over the ownership rights of three proposed mega power projects in the state with a combined capacity of 126 MW.

Tata Power had been given the projects on 1st October 2010. Though documents reveal that Bangalore based Velankani Renewable Energy was provided with ‘in principle’ approval on December 31 last year for the same three projects of the state. The implementation agreement with the Bangalore based company was to be signed on January 31 which did not take place. The Velankani Renewable Energy unit has already filed a caveat petition in the High Court of Sikkim to obstruct its competitor.

Tata Power has threatened to initiate legal proceedings against the Sikkim Government in regards to proposed hydro power projects of Rolep in East, Ralong in South and Chakungchu in North district respectively. A reminder letter was written to State Power Department by TATA Power on 24th of January2011, which claims that the Rolep, Ralong and Chakungchu projects had been awarded to Tata power in the first place. Three power projects had been awarded to them and had been approved by the Sikkim Government and transmitted to them via Sikkim Power Development Corporation (SPDC) through a letter written on 1st October 2010.

The same letter also mentioned that the terms of availing the loan to the extent of Rs. 70 corers should be made acceptable to the Sikkim Government and on 6th January, the company had agreed to provide the entire amount of loan of Rs 70 corers as non-refundable upfront premium. This meant that the aggregate non-refundable upfront premium payable to SPDC would be Rs 90 crores. The company claims that it had been ready and willing to enter into the implementation agreement of this combined project and also deposit an amount of Rs. 90 crores with the Sikkim Government.

power project

The Tata Power has also expressed its astonishment on the decision of the State Power department to issue an ‘in principle’ approval to Velankani despite the fact that projects had been awarded to them. The implementation agreement signed with Velankani by the State government will be unjustifiable and illegal. Tata Power has requested the Power department to withdraw its letter of intent issued to Velankani and not to grant approval for the projects to any other person or company.

Tata power has warned the state Power department that in case the Sikkim Government does not do the needful by 30th January, then they will take legal action to protect their interests.

Tata Power is heading towards a legal battle with Sikkim Government. The Velankani Renewable Energy has already taken a precautionary legal remedy. It filed a caveat petition earlier this month claiming that it has been already issued the letter of intent dated December 31, 2010 from the State Power department for development of Rolep, Ralong and Chakungchu projects.

Company director Mr.VN Rathnakar, Velankani Renewable Energy has expressed apprehensions that the respondents are likely to challenge the issue of the letter of intent to it by the State Power department. The respondents are Amalgamated Transpower (India) Limited, Rolep Hydro Electric Power Company Limited, SPS Synergy Solar Limited, Moserbear and Tata Power. The Velankani Renewable Energy has prayed to the court that no order be made on petitions filed by the respondents challenging the letter of intent issued to it without prior notice to it and without affording opportunity of hearing to it.

It is yet to be ascertained whether the State Power department inked a formal agreement with the Velankani Renewable Energy. Today was the date for signing of the agreement as per the documents. Speaking with state Power department Secretary, Pema Wangchen clarified the matter relating to Tata Power and Velankani Renewable Energy. He admitted that the projects had been awarded to Tata Power earlier but later the department chose Velankani Renewable Energy for a host of valid reasons. Mr. Wangchen said that “We have allocated the projects to Velankani by following standard procedure of the State Government and have not done anything wrong”.

Tata Power had made an initial offer of Rs. 20 crores as upfront premium which was later enhanced to Rs. 40 crores. The Secretary further added that the department had written to Tata Power on 1st October 2010 stating that their proposal had been approved but they did not come forward with better terms acceptable to the Sikkim Government. The approval was in principal and negotiations were still going on. The deal with Tata Power had not been finalized.

Tata Power remained silent after offering Rs. 40 crores as upfront premium and did not show much interest when Velankani came and offered Rs. 67 crores as upfront premium for the three projects. Velankani’s bid was the highest as on 27th December 2010, when the selection of the company was done. When Velankani was selected, TATA Power is now suddenly raising the upfront premium. “We have done what was best for the State then and now we cannot entertain the requests of Tata Power. But if the Velankani Renewable Energy fails to come for the agreement then the next bidder will be looked upon” he concluded.

(Courtesy: Sikkim Mail)



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