Date:24/08/2003 URL: http://www.thehindu.com/2003/08/24/stories/2003082404560300.htm

Southern States - Karnataka

Govt. favouring MNCs in power project: BJP

By Our Special Correspondent

GULBARGA AUG. 23. The BJP has accused the State Government of granting undue favours to Multi-National Companies (MNCs) in the project taken up to improve the power distribution system under the Centrally-assisted Accelerated Power Distribution Reforms Programme (APDRP). The State exchequer lost more than Rs. 100 crore due to this bias, the party has charged.

The Vice-President of the State unit of the party and MLC, M.R. Tanga, on Saturday accused the State Government of wilfully changing the pre-qualification conditions in the project tenders, which the Karnataka Power Transmission Company Ltd. (KPTCL) had floated, to prevent the State-owned company, KAVIKA, from participating in the tender process. Dr. Tanga charged that this was done to help MNCs such as the ABB, L&T, KECIL, and DCIL jack up quotations, which in turn caused a loss of more than Rs. 100 crore to the State exchequer. In a similar project implemented in 2001 with APDRP funds, KAVIKA's participation in the tender had forced MNCs to reduce their original quotations, saving nearly Rs. 60 crore for the State exchequer.

But for reasons best known to the Government, stricter prequalification norms had been introduced in the tenders this time. According to the new norms, the participating company should have carried out similar works worth more than Rs. 5 crore, its turnover should be more than Rs. 10 crore, and it should provide a bank guarantee of 45 per cent of the total cost of the project. Dr. Tanga said stiff conditions prevented KAVIKA from quoting and this in turn helped other MNCs quote 25 per cent more than the amount quoted for a similar project carried out in 2001.

He alleged that on the pretext of power reforms, the State Government was blatantly helping MNCs "loot" public money. Dr. Tanga said he would seek the Karnataka Electricity Regulatory Commission's (KERC) intervention to stop the tender proceedings and change the tender clauses so that KAVIKA could participate in the tender process. He also alleged large-scale misuse of funds provided under the APDRP for introduction of state-of-the-art meters throughout the State. Dr. Tanga said as per APDRP specifications, funds provided under it should have been used for the purchase of electronic meters, but KPTCL had given orders for the purchase of electro-mechanical meters.

Also, the prices offered for the purchase of these technically inferior meters varied from one electricity company to another. The Bangalore Electricity Company Ltd. (BESCOM) recently spent Rs. 987 apiece on meters similar to those the Hubli Electricity Company Ltd. (HESCOM) and the Mangalore Electricity Company Ltd. (MESCOM) had purchased at Rs. 627 apiece. Dr. Tanga said that the KPTCL had decided to buy nearly nine lakh meters of different capacities from five MNCs and this would cause a loss of more than Rs. 13.73 crore to the State exchequer. Since the cost of the meters would be transferred to the consumers, the issue should be taken up with the KERC.