U'khand may not revive hydel project scheme

The controversial self-identified scheme under which the allotment of 56 hydel projects was cancelled this month is unlikely to be revived in the near future.

This is being seen as a setback to the energy sector in Uttarakhand where hydropower is considered to be one of the key growth drivers. Official sources told Business Standard that the government finds it tough to reinitiate the bidding process under the self-identified scheme after a host of private companies challenged its decision to cancel these projects.

The government had returned the premium money of over Rs 32 crore to all the companies soon after cancelling the whole bidding process this month. The government had charged a premium of Rs 5 lakh per Mw on the 56 projects with a total capacity of over 960 Mw. But now, nearly six to seven companies have sent back the drafts to the government, challenging the basis of the cancellation process. A Punjab-based company has even threatened to move to court on this issue.

“It is true that some companies have returned the money. We are now assessing the whole issue to give an appropriate response to them,” said Energy Secretary Utpal Kumar Singh. The sources told Business Standard that the government is taking a legal opinion over the issue.

While cancelling the projects last week, the government had said the Uttarakhand Jal Vidyut Nigam Limited (UJVNL), which was the nodal agency for the bidding process, has been asked again to modify the advertisement of July 25, 2008 for inviting fresh bids for the self-identified projects. However, the UJVNL has so far, not received any official communication from the government in this regard.

The decision to cancel the process was taken by a high powered committee under the chairmanship of Singh. A careful study of the objections which had come after the allotment of 56 hydel projects, the committee found that there were certain flaws in the advertisement.

Under the 2008 power policy, the government had received 741 bids for setting up hydel projects upto 25 Mw. Early this year, the government quietly allotted 56 hydel projects. Some of the companies like Madhucon Project Ltd had been allotted three projects.