Govt bait for Cogentrix
Tribune News Service

NEW DELHI, Dec 16 — The Centre today dangled a speedy counter-guarantee clearance to revive the 1013 Mangalore power project, a condition set by its promoters — Cogentrix of the USA and the China Light and Power — to reconsider their decision to withdraw from the fast-track project.

The Union Power Minister, Mr P.R. Kumaramangalam, told the Lok Sabha that the Government was keen to go ahead with the thermal power project and the Union Cabinet would consider within a week a counter-guarantee for it.

Replying to a calling attention motion moved by former Karnataka Chief Minister and Congress MP S. Bangarappa and others on the status of the project, Mr Kumaramangalam said: “I will be going to the Cabinet for formal approval of the counter-guarantee (on the foreign loan component) and intimate the promoters about it by next week”.

A speedy counter-guarantee clearance and adherence by the Karnataka Government to the power purchase agreement of 1997 were among the conditions put by the Managing-Director of the Mangalore Power Company, Mr Ron Somers, to recommend revival of the project to the foreign promoters.

Mr Bangarappa and others in the calling attention motion criticised successive governments for the nearly seven years of delay in giving clearance for the project and expressed concern that withholding of the counter-guarantee had sent the wrong signals to foreign investors keen on doing business in India.

Mr Kumaramangalam said the Government had yet to receive any official communication on the decision of Cogentrix and China Light and Power to withdraw from the project. “I have requested them to reconsider their decision (reported in the press) and the officials have assured that they would revert to us after consulting the Board of Directors of the two promoting companies”, he said.

The Minister said the government had already given a counter-guarantee to three of the eight fast-track projects in the country and it had decided to consider the issue of counter-guarantee for the Mangalore project after the verdict of the Supreme Court on a special leave petition filed by the Karnataka Government.

Earlier in 1997, a public interest litigation had been filed in the High Court of Karnataka in which issues such as award of the project to Cogentrix, signing of MoU, financial position of Cogentrix and shifting of the project site from Bangalore to Mangalore were raised.

The High Court in its judgement passed in February, 1998, ordered that an FIR on the charges be registered with the CBI and the Director-General of the investigating agency get it investigated.

The Supreme Court, however, on December 13, four days after the two foreign companies announced their decision to withdraw from the project, set aside the Karnataka High Court order, thus absolving the promoters of allegations of kickbacks.

Mr Kumaramangalam said the issue of counter-guarantee could be considered by the government after the Supreme Court order.

Stalemate persists

BANGALORE, Dec 16 (UNI) — The stalemate over the clearance of the power project persisted today with the Karnataka Cabinet referring a vital financial issue to a high-powered committee.

Briefing mediapersons after the meeting, state Information Minister B.K. Chandrasekhar said the high-powered committee to be headed by eminent energy management expert Deepak Parikh would consider, among other things, the issue of opening escrow account as demanded by the company in its latest letter to the government issued after it had ceased operations on December 9.