House panel to review Orissa-AES share pact

A House committee of the Orissa Assembly will review the memorandum of articles and shareholders' agreement between the state government and AES Corporation, pertaining to transfer of shares at the time of disinvestment of state-owned utilities, the Orissa Power Generation Corporation (OPGC) and the Central Electricity Supply Company (Cesco).

The committee will also probe the alleged irregularities perpetrated by AES in the management of Cesco and recommend measures to recover over Rs 400 crore owed by the US company to the Grid Corporation of Orissa (Gridco).

The decision to form the House committee was taken yesterday after members of the state Assembly cutting across party lines expressed grave concern over the "high-handedness" of AES in running of both the companies. The speaker ordered the probe taking into account the members' sentiments.

AES had picked up 49 per cent stake in OPGC and 51 per cent stake in Cesco in 1999. Though it is still in charge of day-to-day management of OPGC, AES had abdicated its responsibility of running Cesco in 2001, citing losses as the main reason. The Orissa Electricity Regulatory Commission (OERC) has since appointed an official to look after the management of Cesco.

At the time of relinquishing the management of Cesco unilaterally, AES owed over Rs 400 crore to Grdco towards payment of bulk electricity supply bill. Gridco has gone to the court to recover the dues.

Replying to members' concern in the Orissa Assemble, State Energy Minister SN Patro said disputes between the state government and AES were pending in different courts.

He endorsed most of the charges made of members against AES and said the US Company was taking advantage of some grey areas in the shareholders agreement and amended memorandum of articles at the time of disinvestment of OPGC and Cesco.

He, however, pointed out that the state government had rejected the request of AES for withdrawal of cases pending against it and also for increasing the company's stake in OPGC from the present 49 per cent to 51 per cent.

AES had made these requests while negotiating for expansion of Ib valley thermal power station of OPGC through addition of two more units of 250 megawatt each.

He, however, said the third and fourth units of Ib valley thermal plant, to be jointly promoted by the state government and AES, was part of the OPGC disinvestment agreement.

He clarified that the high-handedness of AES management was because of the faulty agreement made by the then Congress government.