Chief Minister Virbhadra Singh on Thursday showed grave disappointment on the recent deal between Abu Dhabi-based TAQA-led consortium and Jaypee Group over two hydro power projects in the State facilitated by Union Ministry of Commerce and Industries.
“State was not taken into confidence by the Central Government before facilitating the deal on the projects which was claimed as Foreign Direct Investment (FDI) for creating infrastructure. It is actually not FDI, as they have not brought any new investment to the country instead projects were bought and sold by two companies,” said Chief Minister Virbhadra Singh.
“They made the deal look like FDI for creating infrastructure but the fact is it is not and secondly my concern is that no deal should be made without the consultation of State Government, especially on strategically located projects,” said Singh.
He added that the two projects Baspa stage II and Karcham-Wangtoo having combined capacity of 1,391 MW, run by Jaiprakash Power Ventures limited of the Jaypee Group has sold to TAQA-led consortium are situated on the China border and could pose a threat to national
security interest. “If the company was unable to run the projects, then State Government would have given the project to any Public Sector Undertaking (PSU) but MNC should have been dissuaded on strategic projects,” said the Chief Minister.
He said that State Government has written to the company to explain how without prior permission, the two projects were sold to a foreign company. Company has signed the implementation agreement and MoU with the State, and change of equity pattern without prior permission of State Government is flouting of clauses. On the questions of options available with the State Government, Chief Minister said that all options are open and if need arises the matter could be taken to the court. Union Commerce and Industries Minister Anand Sharma, who also hails from the State, has been facilitating the deal between Jaypee Group and TAQA-led consortium.
On March 3, at a high level meeting held at Mumbai between UAE-India High level Joint Task Force investment of the company through an agreement in the country was recognised, which was co-chaired by Sheikh Hamed Bin Zayed Al Nahyan, chairman of the Abu Dhabi Crown Prince Court, and Union Commerce and Industry Minister Anand Sharma.
Both the hydro power plants Baspa Stage II and Karcham Wangtoo are located in Kinnaur district of Himachal Pradesh and are within two kilometres of each other and share support facilities. They use run-of-the-river technology to convert natural water flow to electricity, eliminating the need for
a reservoir. TAQA, which holds a 51 per cent stake in the consortium, will have control of operations and management of both the projects under the proposed deal. The remaining equity will be held by one of Canada’s largest institutional investors (39 per cent) and IDFC Alternatives’ India Infrastructure Fund II
(10 per cent). The equity invested by the consortium in the acquisition of the two hydroelectric plants will amount to approximately Rs3,820 crore (USD 616 million, based on Mar 1, 2014 foreign exchange rate), of which 51 per cent is from TAQA. The consortium will also acquire the assets’ non-recourse project debt.