Return of upfront premium money: HP to face more financial trouble

Amidst empty public exchequer of Himachal Pradesh and spending beyond the largesse, now the Sukhu government is being posed by the imminent challenge of facing more financial troubles. Most recent one is the latest decision on the 260 MW Yangthang hydroelectric power project, as an arbitrator, has ordered the government to return Rs 60 crore upfront money to the company implementing the said project.

Since the first day of assuming office, the Sukhu government is being hindered from sailing smoothly. Moreover, it has also been legally bound to return thousands of crores to private companies and big corporate houses. These houses are not only making big bargains with the government to maximize their profits in cement plants, hydropower projects, Four-lane constructions and transmission line projects but are also taking harsh steps like arbitrarily increasing the prices of products or by shutting down production or by withdrawing from Corporate social responsibility (CSR).

The State government is facing a financial trap. Firstly it has to own liabilities of the previous governments as well as payback hundred thousands taken in-form of advances or upfront premium money from Corporate houses for investment in power projects. Experts believe that without realising instability in the power market before Ukraine war, the then, State government signed MOUs and took upfront money as advance for many hydropower projects. As per insiders information currently there may be more than a dozen petitions that are pending in the courts for return of money, that was forfeited arbitrarily by the government.

During Jai Ram Thakur Government and now in the Sukhvinder Singh Sukhu regime, various orders of the arbitration courts are being reported against the State. According to highly placed sources in the Government public coffers of the Sukhu government may bleed further as these liabilities (Amounting to hundreds of crores)  may deteriorate the financial health, further.

In the case of Yangthang hydroelectric power project orders have also been given to return the pay-out with interest. The said project was to be set up on Spiti river in Kinnaur district. But the company backed out and thus the government forfeited the upfront money as per the provisions of the contract. However, dissatisfied, the company filed a case before the arbitrator and now the government has to return Rs 60 crore.

Similarly, in the case of Sally hydroelectric project, the arbitrator had ordered the government to return the upfront money.

The biggest difficulty for the government which is getting all its work done by way of taking loans, is that, now it will have to deposit this amount along with challenging the decision of the arbitrator in the High Court. In the case of Uhl Hydroelectric Project, instead of the upfront money of 9 crores, the government had to deposit 36 ​​crores in the High Court.

In most such matters, no investigation has been conducted that why all this happened, or who is responsible for it. Neither the responsibility of the bureaucrats is fixed nor that of the leaders. All the opposition parties are silent on all these issues.

Earlier, in Jairam Government, Himachal Pradesh High court had passed a similar order in favour of Adani Power to return upfront money Rs 280 crores to Adani Power in the case of Jangi-Thorpan project. In another case by Tata Power and a Company of Singapore, the State have been ordered to return Rs 48 crores. The matter is of Chamba’s Duggar hydropower project.

Critics apprehend that the Government could not fight a substantial legal battle in the court, as decision(s) are coming against them, one after another. This way the State coffers will be emptied, they feel.  Moreover, no one’s responsibility has been fixed as to why such a situation has arisen.

On one hand the Sukhu government has sought or invited public suggestions to improve the state resources in the coming budget. Whereas on the other, the Government was still relying on same old bureaucracy which was responsible for this financial mess of Rs 74000 Crore debt and for spelling doom on the previous Government. Many citizens across the State question that the State government should showcase stern guts by way of fixing the accountability in such matters.

Also, the quest here is, that, could Sukhvinder Singh Sukhu bureaucracy take-on such Corporate houses which have hundreds of Crore pending with them as recovery towards the government. One such example is the  five star hotel near State capital ‘Wildflower hall’. Pertaining to the EIH owned hotel, the Arbitrator had awarded in favour of Government. In another case thousands of crores were awarded by Supreme Court of India on account of Reorganization of Punjab and for the State’s share in many power projects conceived before formation of Himachal Pradesh. Could Sukhvinder Singh Sukhu government have the political maturity or can the state bureaucracy wage battle with Punjab, Haryana and Rajasthan for return of the State’s share pending for disposal.

Noteworthy, that all such matters are pending as the government has to fight legal battle, more aggressively.  Or else, in such a situation, how can the treasury of the government  be saved. The most surprising thing is that as of date, neither is any review in the cabinet planned in such matters nor has any sub-committees been formed to resolve these issues.