Reported loss to State of Karnataka due to withdrawal by
Cogentrix Promoters from the proposed power plant in Mangalore
SHRI S. BANGARAPPA (SHIMOGA): Sir, I call the attention of the Minister of Power to the following matter of urgent public importance and request that he may make a statement thereon:
"The situation arising out of reported loss to State of Karnataka due to withdrawal by Cogentrix promoters from the proposed power plant in Mangalore and steps taken by the Government in regard thereto."
THE MINISTER OF POWER (SHRI P.R. KUMARAMANGALAM): Sir, it has been reported in the press that the promoters of the 1013.2 MW Mangalore Thermal Power Project have decided to withdraw from the development of this project on the ground that it is no longer feasible to develop it, owing to inordinate delays in obtaining various clearances and Public Interest Litigation in Courts. However, no official communication has so far been received by the Government from the promoting companies in this regard.
The Mangalore project is being developed by Mangalore Power Company promoted by Messrs. Cogentrix USA and Messrs. China Light and Power. This is one of the original eight counter guarantee projects being developed on the MOU route. The project was given Techno-economic Clearance by CEA at a provisional cost of US $ 751.574 million plus Rs. 15,808.9 million and FGD cost of US $ 57.93 million plus Rs. 910.9 million. Most clearances including environmental clearances and foreign investment approval have been obtained.
Under the revised procedure, for the issue of counter guarantee, the scope of the counter guarantee has been limited to cover only the outstanding foreign debt in the event of termination of PPA. Under this procedure, there would be no further examination of the PPA by Government of India and it will be the responsibility of the State Government to satisfy themselves about the reasonableness of the tariff before financial closure. However, the State Government would be required to send copies of the final, revised PPA to the Ministries of Finance and Power for information and record before financial closure, along with a statement from the SEB/State Government about having considered the comments of the CEA and consultants of Ministry of Finance along with the certification that the PPA is in line with Government of India notification/law. In order to bring down the tariffs, the State Governments have been asked to adopt certain measures like not allowing income tax on incentives to be pass through in tariff and not allowing additional profits to be derived by the developer on account of the actual operational performance being better than the normative levels fixed for the purpose of tariff fixation.
While three fast track projects have already been given counter guarantee under the revised procedure, the Government decided to consider the issue of counter guarantee for this project after the verdict of the Supreme Court on a SLP filed by Government of Karnataka became available.
Earlier, in 1997, Shri Arun Kumar Agrawal had filed a Writ Petition No. 10696/97 in the High Court of Karnataka in which issues such as award of the project to Cogentrix, signing of MOU, financial position of Cogentrix, shifting of the project site from Bangalore to Mangalore, etc., were raised. The High Court, in its judgment passed in February, 1998, ordered that an FIR would be registered with the CBI by the Government of Karnataka under the provisions of Delhi Special Police Establishment Act for various cognisable offences without naming any person or group of persons as accused, and the Director General of the CBI would get it investigated under the supervision and control of an officer not below the rank of Deputy Inspector General of Police. Government of Karnataka filed a SLP in the Supreme Court against the High Court judgment. The Supreme Court after hearing, reserved the final judgment on 15.1.1999.
It is now learnt that the Apex Court has delivered the judgment on 13.12.1999 in which the High Court judgment is reported to have been set aside. However, copy of the Supreme Court order has not so far been received by us. After the judgment of the Supreme Court was pronounced, the officials of the Company met me on 13.12.1999. I have requested them to reconsider their decision to pull out from the project and the officials have assured that they would revert to us after consulting the Board of Directors of the two promoting Companies. The issue of counter guarantee can be considered by the Government after receipt of the Supreme Court order.
MR. SPEAKER: Shri Bangarappa, the statement made by the hon. Minister is very clear. You can only ask clarifications on this.
MR. SPEAKER: I will allow you. But let me complete this subject first. Please understand the procedure.
MR. SPEAKER: You must know the procedure. Please understand that the hon. Minister has made a statement in regard to the Calling Attention Notice and some hon. Members would have to ask some clarifications on that. Please understand this.
MR. SPEAKER: First of all, you must know the procedure. I know the importance of the subject that you would like to raise. I will call your name and allow you to speak also.
MR. SPEAKER: Shri Chauhan, you are a senior Member. You know the procedure. In the Calling Attention Motion, clarifications would have to be asked and those would have to be answered by the hon. Minister.
MR. SPEAKER: Shri Bangarappa, the statement is very clear. Now you can ask some clarifications on that. Please ask pointed clarifications.
SHRI S. BANGARAPPA : Sir, this project relates to the production of power of about 1000 MW. The State of Karnataka is reeling under severe drought and power conditions. The State requires about 2000 to 3000 MW of power. That is the demand of the State.
Sir, when I was the Chief Minister of Karnataka, we signed an MoU in the year 1992 with this Cogentrix company to produce 1000 MW of power in Karnataka. After I relinquished the office of the Chief Minister, the successive State Governments also continued the process of obtaining all the clearances -- that were initiated by us -- that were pending before the Government of India. Later on, a site for the project was also located at Mangalore district, in a place called Nandipur. Thereafter, the Karnataka Electricity Board entered into an understanding with M/s Cogentrix which is one of the promoters of the Mangalore Power Company. The Mangalore Power Company consists of two subsidiary companies, namely, M/s China Light and Power Company which is based in Hong Kong and the other one is M/s Cogentrix.
Now, after the process was initiated by the State Government through the State Electricity Board the matter was put up to the Government of India. This process was initiated in 1992 under the regime of the liberalised economic policy announced by the then Congress Government in 1991-92. But since then this project has not found favour with the Government of India.
Sir, this entire project was divided into four phases and it was slated to produce 250 MW of power at the initial stage and continue to add 250 MW each in the other three phases of production. The Central Electricity Authority, the Ministry of Power, the Ministry of Environment and the Law Ministry were involved in this project. The Central Government unnecessarily and continuously has been creating so many problems at so many levels.
Sir, all these things happened before Shri Kumaramangalam took over this Ministry. But my worry is that even after his taking over this Ministry things have been allowed to continue like this. Why should things continue like this? What I feel is that the cases that are pending before the Karnataka High Court ... (Interruptions) It is a serious matter ... (Interruptions)
SHRI K.H. MUNIYAPPA (KOLAR): Why are you interrupting the Calling Attention motion? ... (Interruptions)
SHRI S. BANGARAPPA : Sir, now there were two sets of PILs filed ... (Interruptions)
MR. SPEAKER: Shri Bangarappa, you can seek the clarification now.
SHRI S. BANGARAPPA : Sir, I know the scope of the discussion. But I would take a little time.
Sir, one PIL was filed in the Karnataka High Court relating to environment matters but that was dismissed by the Karnataka High Court. The other PIL was filed regarding receiving of some kickbacks and something like that. There was a direction to the CBI and the matter went up to the Supreme Court ... (Interruptions)
SHRI C.K. JAFFER SHARIEF (BANGALORE NORTH): Sir, what is this? ... (Interruptions)
MR. SPEAKER: Bangarappaji, please ask your question.
SHRI S. BANGARAPPA : Sir, things have gone on like this and now the Supreme Court has delivered its judgement on the 13th of December, as the hon. Minister has just now stated. The entire thing is clear now. Earlier, when these matters were pending in the High Court and Supreme Court, there was no stay order asking the Central Government and the State Government not to pursue the matter. Yet, unnecessarily the Government of India had allowed things to lie like this for years together. It had taken about five to seven years for the Government of India, to take clearance on just one point.
MR. SPEAKER: Anyhow, now the Supreme Court has disposed of the matter.
SHRI S. BANGARAPPA : This is a separate issue. Legally there was no stay order.
MR. SPEAKER: You ask your question please.
MR. SPEAKER: Please take your seats.
MR. SPEAKER: Nothing will go on record except the speech of Shri Bangarappa.
MR. SPEAKER: I appeal to you to resume your seats. This is a Calling Attention. Please understand.
MR. SPEAKER: I will allow you. You should not disturb the proceedings like this. Please take your seats.
* Not Recorded.
MR. SPEAKER: Shri Shivrajsingh Chauhan, I told you that I will allow you. Please take your seat.
SHRI C.K. JAFFER SHARIEF : Sir, this is a very serious matter. ... (Interruptions) If they go on like this, we will not let the House run. ... (Interruptions) Let them decide if they want to run the House or not. ... (Interruptions)
MR. SPEAKER: Bangarappaji, you come to your question straight. You can only seek a clarification.
SHRI S. BANGARAPPA : I know the limitation, Sir.
SHRI PRIYA RANJAN DASMUNSI (RAIGANJ): Sir, I seek your protection. Our Member has the right to seek clarification and yet the Members from the other side are constantly disturbing the proceedings. ...(Interruptions)
MR. SPEAKER: This is too much. Shri Vinay Katiyar, please take your seat.
MR. SPEAKER: There is a rule. Please understand that. You take your seat.
MR. SPEAKER: Shri Katiyar, please take your seat.
MR. SPEAKER: I request the leaders to please intervene.
SHRI SOMNATH CHATTERJEE (BOLPUR): Mr. Speaker, Sir, is it not the responsibility of the Government to run the House? ... (Interruptions) It seems the Government has abdicated its responsibility. ...(Interruptions) Where is the Leader of the House and where is the Minister of Parliamentary Affairs? ...(Interruptions)
MR. SPEAKER: Please take your seat. What is this? You must understand the procedure first. Please take your seat.
MR. SPEAKER: Shri Vinay Katiyar, you cannot say `
MR. SPEAKER: Please take your seat. This is not your business to say.
SHRI R.L. JALAPPA (CHIKBALLAPUR): Sir, they do not want to answer properly ... (Interruptions)
MR. SPEAKER: Shri S. Bangarappa, please be brief. You can seek some clarification. It is already 12.20 now.
SHRI S. BANGARAPPA : Sir, I would have finished my point by now. But they have been disturbing... (Interruptions)
SHRI SOMNATH CHATTERJEE : Mr. Speaker, Sir, give me half a second. It is for you to regulate the House. But if any and every Member from the Treasury Benches tries to regulate the House, how can you regulate the House? ... (Interruptions)
MR. SPEAKER: Mr. Minister, please ask your Members to take their seats. This is not good.
SHRI SOMNATH CHATTERJEE : Sir, this is for you to pull him up. Why is the Minister keeping quiet? Every time, Members from the Treasury Benches are disturbing... (Interruptions)
MR. SPEAKER: What is this? This is not proper.
MR. SPEAKER: Mr. Minister, please ask your Members to take their seats.
SHRI P.R. KUMARAMANGALAM: Sir, the hon. Member, Shri Bangarappa may yield for a second.
MR. SPEAKER: Mr. Minister, first of all, you ask your Members to take their seats.
SHRI P.R. KUMARAMANGALAM: Sir, I am sorry for the disturbance, but I think, it is relevant to point out. The emotions are running high... (Interruptions)
SHRI PRIYA RANJAN DASMUNSI : It is not his business... (Interruptions)...The Minister is responding to the Calling Attention.
SHRI P.R. KUMARAMANGALAM: I have apologized at the outset... (Interruptions)...How can he do like this?... (Interruptions)...I have already apologized.
MR. SPEAKER: Shri S. Bangarappa, the time at our disposal is very short. Please ask the clarification straight.
SHRI P.R. KUMARAMANGALAM: Sir, I was apologetic on behalf of my party MPs... (Interruptions)...He does not want even to listen to me... (Interruptions)...This is too much.
MR. SPEAKER: Shri S. Bangarappa, there are other hon. Members also to speak.
SHRI S. BANGARAPPA : Yes, Sir, I know the value of the time.
Sir, our Power Purchase Agreement was entered into, and it was sent by the State Government through its Electricity Board, Cogentrix company and the Mangalore Corporation, twice or thrice as per the direction given by the Government of India. Then the matter was sent to the Government of India for counter-guarantee.
Sir, then the entire things started. At this point, on the advice given by the Central Electricity Board, the Ministry of Power, the Ministry of Environment and the Ministry of Law, the counter-guarantee had gone through several changes. So, on the part of the Government of India, the whole process consumed about five to five and a half years only to get the counter-guarantee.
Sir, this is a fast track project approved by the Government of India. This is one of the seven or eight power projects announced by the Government of India.
MR. SPEAKER: Shri S. Bangarappa, please hear me. As per the Rule 197 of the Rules of Procedure and Conduct of Business in Lok Sabha, after the Minister has given a statement, there should not be any debate.
SHRI S. BANGARAPPA : Sir, I am not making any debate.
MR. SPEAKER: You can ask one question. Please understand that other Members have also to seek clarification.
SHRI S. BANGARAPPA : There are two doubts that have entered into my mind after going through his statement. Now, an astounding approach has been adopted by the Government of India wherein several changes have gone there on the suggestion given by the Ministries on several stages. You please go through all this. Sir, I have got a long list of evidence ever since starting from 3.7.92. Actually, an appalling situation has arisen now.
MR. SPEAKER: What is your question please?
SHRI S. BANGARAPPA : Sir, the counter-guarantee matter was cleared in 1997. Again, the Minister of Power, that is, the Government of India made suggestions. In his statement, he has suggested that `we are sending this approval to the Government of India and you also keep us informed. And, as per the instructions, we have to clear the PPA, the Power Purchase Agreement.'
Sir, again, they are putting all these questions.
MR. SPEAKER: You please ask your question.
SHRI S. BANGARAPPA : Sir, I would like to know from the hon. Minister whether he is going to clear project once for all