looking to raise funds to meet mounting salary-pension bills, interest payments and other committed liabilities, Himachal Pradesh Government has made changes to power project allotment policy by reverting to upfront bidding and is also contemplating starting online lotteries.
Abandoning the free power bidding procedure, a cabinet meeting presided over by Chief Minister Virbhadra Singh on Thursday had approved putting 37 hydro power projects out for auction where the hydro site would be offered to the highest bidder who has the capacity to make an upfront payment.“There is a policy change in the bidding process for allotting hydro power project sites,” said SKBS Negi, principal secretary power. “We have reverted to the old method of offering the project site to the highest bidder on upfront payment basis,” he added.
For bidding to make per MW of energy potential at any given site, the base price has been raised to Rs35 lakh per MW.The upfront payment policy introduced in December 2006 had by July 2009 fetched the government Rs665.85 crore in ready cash in allotment of 15 medium and large project and 293 small hydro project.
Tweaking the policy introduced by Virbhadra Singh in his previous term, the BJP government led by Prem Kumar Dhumal led BJP in 2008 had changed the terms by fixing Rs20 lakh per MW as upfront payment and the auction was decided on the basis of whoever offered the highest percentage of free power to the State.
With power companies finding it difficult to sell electricity on long term basis and front loading of project costs by down payment for securing a site is going to find few takers this time around, said a HPSEB engineer, on condition of anonymity.With most viable hydropower potential sites on rivers and streams already sold out, a sharp drop in per unit electricity sale price has rendered the project unviable for many companies who failed to achieve financial closures.
Moreover, many of the projects allotted earlier such as the 960 MW Jangi-Thopan-Powari project for which more than Rs200 crore of upfront money was paid, stands cancelled and is again going to be put up for auction, said the engineer.Apparently, with the hill state reeling under an accumulate debt burden of over Rs30,000 crore, the cash strapped government has reverted to the old policy hoping for easy money to sure up finances. The State’s tax base unable to keep pace with runaway expenditure, the Cabinet in its last meeting also deliberated upon starting lottery for adding another revenue stream into the Government
exchequer.
Chief Minister Virbhadra Singh told reporters, “a decision is yet to be taken but a proposal is there for starting only online lottery.”