The Uttarakhand High Court in Nainital has upheld the state government’s 13-month-old decision to cancel 56 hydel projects, dealing a blow to some companies that had filed a petition challenging it.
A division bench comprising Chief Justice Barin Ghosh and Justice Sudhanshu Dhulia gave the verdict, prompting some of the companies to now possibly move the Supreme Court.
These projects, which aimed at a power generation capacity totalling 963 MW, were initiated in 2008 when B C Khanduri was the chief minister of the hill state. The plan was scrapped in the wake of a PIL alleging irregularities in the allotment of these projects.
On Wednesday, State Chief Secretary Subhash Kumar, when contacted, said he wasn’t sure about the final fallout of the judgment. “I can’t say what will the future course of action on these 56 hydel projects,” he told Business Standard. Other sources, though, said some of the firms look set to appeal to the apex court.
Fast industrialisation is jacking up the demand for energy in 2000-formed Uttarakhand, where hydropower is considered to be one of the key growth drivers. Thus, the power sector has taken a beating with the cancellation of 56 projects and also the scrapping of three big projects like NTPC’s 600-Mw Loharinag Pala last year.
Soon after cancelling the projects in mid-July last year, the government had returned the premium money of over Rs 32 crore to all the companies. The government had charged a premium of Rs 5 lakh per Mw on the 56 projects with a total capacity of over 960 Mw.
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While cancelling the projects, the government had said the Uttarakhand Jal Vidyut Nigam Limited (UJVNL) —the nodal agency for the bidding process — has been asked again to modify the advertisement of July 25, 2008, inviting bids for the self-identified projects. UJVNL has so far not received a pertinent official communication from the government.
Under the 2008 power policy, the government had received 741 bids for setting up hydel projects upto 25 Mw. In the beginning of 2009, the government quietly allotted 56 hydel projects. A few months later, the government abruptly cancelled the entire allotment process.