Cbi Zeroes In On Power Deals During Rao Regime

The Central Bureau of Investigation (CBI) has started looking into various contracts awarded in the power sector during the five years of the Narasimha Rao government.

The CBI has written a number of letters to the power ministry seeking information on these contracts most of which concern the National Thermal Power Corporation (NTPC), the National Hydroelectric Power Corporation (NHPC), the Delhi Electricity Supply Undertaking (Desu) and the Power Grid Corporation (PGC) of India.

According to an official source, the number of contracts being investigated has already exceeded 30 and more requests are pouring in almost every day from the investigating agency.

 

The CBI is especially interested in the award of a Rs 200-crore contract for high voltage direct current (HVDC) transmission in 1995. The letter of intent for this project was issued towards the end of December 1994 with government choosing to overlook the advice for caution given by the then cabinet secretary Surendra Singh.

In a letter dated December 28, 1994, Singh wrote the then power secretary R Vasudevan, "I am enclosing a copy of a representation given to me by Siemens about the evaluation of offers by Power Grid Corporation (PGC) of India Limited in respect of their HVDC Vizag 1x500 mw back-to-back project.

Their representative, who saw me today, has alleged grave irregularities and mentioned that the letter of intent is likely to be awarded by the corporation in next day or two to a rival of their's even though, according to this representative, the project has not even been approved by the CCEA yet. You would, no doubt, like to look into this matter to ensure that the evaluation of offers is done in a proper manner."

In a reply dated December 29, 1994, Vasudevan confirmed the fact that CCEA approval had not been obtained but justified the move to issue an LoI to the "lowest bidder", GEC Alsthom.

Drawing the cabinet secretary's attention to PGC's reply to the issues raised earlier by Siemens, the power secretary claimed that "evaluation has been carried out strictly in line with the provisions of bid documents...

Siemens had pointed out that the tender evaluation committee had not attempted to make a comparison between the two competing bids to determine which was the cheaper financing offer.

The other issues raised by Siemens was the failure to disqualify GEC Alsthom for not offering a financing offer for the rupee component of the project and unfair loading of the Siemens bid by about Rs 1 crore.

The LoI to GEC Alsthom was issued under the leadership of R K Narayan, the then chairman-cum-managing director of PGC. Narayan's name figures in a CBI chargesheet alleging favours to a Jain Brothers' (of hawala fame) company in an NTPC contract.

After retiring from PGC, Narayan became general manager of Desu. Another PGC official, S C Parekh, whose name figures in CBI chargesheet, continued to officiate as the PGC chief executive for some time.