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Congress demands CBI probe into irregularities in power sector

india Updated: Dec 18, 2010 23:42 IST

Blaming Orissa government for not taking action against Reliance Energy Limited (REL) even though the company has "defaulted" in paying dues, Opposition Congress on Saturday demanded a CBI probe into alleged irregularities in the state's power sector.

The issue relating to the controversy between the state owned Gridco (grid corporation of Orissa) and REL was discussed through an adjournment motion in the Assembly.

"The state government was reluctant to take action against REL even though the company had defaulted in paying its dues," said Congress member Anup Sai.

Though tenure of the share holding agreement between Gridco and REL had expired six years ago, the company has not renewed it, Sai said, adding, REL had 51 per cent stake in the three distribution companies in north, south and western region of the state.

While Gridco was looking after power distribution through CESU (central electricity supply utility of Orissa) in central region, REL was managing the job through Nesco (northen electricity supply company), Wesco (western electricity supply company) and Southco (southern electricity supply company).

51% share of Nesco, Southco and Wesco was given to BSES through a bidding at a cost of Rs 117 crore by the state government when it reformed the power sector in 1997. REL has now taken over the management of BSES.

"The state government has already filed cases against REL at Orissa Electricity Regulatory Commission (OERC) and High Court for not extending the tenure of the share holding of its three discos," energy minister Atanu S Nayak told the House while replying the debate.

Though the three distribution companies (discos) run by REL issued bond worth Rs 400 crore towards dues of Gridco in 2000, the funds could not be realised, the minister said, adding, state government had given those bonds to NTPC for supplying electricity to Gridco.

"Discos stopped payment only after paying Rs 110.80 crore against their bond value of Rs 400 crore. Therefore, NTPC issued threat to the state government cautioning that it could stop power supply if its dues were not paid," the minister pointed out.

Under such circumstances, the state government had to pay rest of the money to NTPC even as the REL's three discos did not pay their dues.

The state government had already moved Company Law Board, Kolkata against REL. However, discos did not pay their dues showing that they did not have funds in Escrow Account.

The state government had meanwhile constituted a task force to look into the financial dispute between the Gridco and REL, the minister said.

This apart, he pointed out that the government had also set up a ministerial group headed by Finance minister to resolve the dispute between Gridco and REL in order to bring positive changes in the power distribution.

Opposition members, however, demanded that the state government must cancel power distribution license to REL as it had defaulted in making payment to Gridco and also running its business without renewing its share holding agreement.

Besides, Sai pointed out that REL's default amount had increased from Rs 400 crore to Rs 730 crore. This apart, REL had also incurred financial benefits from World Bank and Power Finance Corporation (PFC) by showing that it was in charge of power distribution in the state.

The Congress members also criticised the state government's new CAPEX (capital expenditure) programme under which REL's three discos would benefit in the name of improvement of power distribution.