The central government’s work in the power sector can be marred by what is happening in the state governments, particularly states that are run by Congress governments where corrupt practices continue unabated. This issue exposes the Hydro Power Scam in Himachal Pradesh. This is the Brakel Fraud story, which began in 2006 when Virbhadra Singh was Chief Minister and continues to the present times, now that he has again returned as CM.
In 2006, the HP government awarded a 960 MW hydropower project to Brakel Corporation NV. That very year, the state’s Vigilance & Anti Corruption Bureau came to the conclusion that the company forged their financial and technical qualifications to match the bid requirements. It was also found that the pre-bid consortium agreement that Brakel submitted was also forged. Standard Chartered Bank, presented as a consortium member, said no such agreement existed. When the company bought the bid document in 2005, it was not registered, so in 2006 they registered a company with a similar name and proceeded to fabricate their document by erasing their original identity. Read more about their cheating methods in the text of the story. This was a project which required an investment of Rs 6,000 crore but this was a $1 paid-up capital company. No upfront amount was paid despite demands raised by the state government; a compromised administration let the matter persist for a year.
Then under the BJP government of Prem Kumar Dhumal a showcause notice was issued and both the upfront payment and the interest, total of Rs 193.98 crore, were recovered from Brakel. Subsequently the Income Tax department investigations into the flow of funds revealed that Brakel had received money from four Adani group companies for which they would sell 49 per cent of the project. This was a violation as prior permission of the state government was necessary. Brakel’s behaviour has been a big cost for the state. In one of the affidavits, the state government under the Dhumal administration stated Brakel’s misrepresentation and fraud has cost the state Rs 2,700 crore.
And what did Virbhadra Singh do, in the face of all this, in his second innings! In September 2015, the HP cabinet decided to refund the amounts the previous administration had collected from Brakel to the Adani group. The project is now to be revived by SJVNL, where GoHP is a stakeholder.
