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Gujarat denies giving favours to any industry

But in a statement issued in New Delhi, the Gujarat government has rejected CAG’s report speaking of ‘undue favour and benefits’ to Reliance and Esaar and said that it had not given any favour to any industry. In the five reports tabled by the Anandi Patel administration in the state legislative assembly on the last day of the budget session to avoid confrontation with the opposition, the CAG has said the Narendra Modi government had extended undue benefits to corporate giants like Essar Power, Reliance Petroleum and Torrent Power and Adani Group.

In its performance audit for a period of 2008-09 to 2012-13 — when the current Prime Minister Modi was the Chief Minister of Gujarat — of the state-owned Gujarat Maritime Board, the CAG pulled up the state government for giving undue benefits to Reliance Petroleum Ltd (RPL).

The benefits amounted to Rs6.5 billion in terms of short recovery by erroneous calculation of set-off value and application of incorrect wharfage rate after the cost of captive jetty it constructed. As for the Essar Group, the CAG said, the ‘change’ of delivery point subsequent to finalisation of power purchase agreement (PPA) — which took place with the Gujarat Urja Vikas Nigam Ltd (GUVNL) — led to passing of “undue benefit to Essar Power Gujarat Ltd for Rs6 billion during the tenure of PPA”.

The PPA was signed in February 2007. CAG also noted that the change in the delivery point helped the Essar Power “save” Rs520 million as it did not have to construct transmission lines, and saved another Rs215 million a year as there were “no line losses”. The agreement with the GUVNL was supplying 1,000 MW of power for 25 years.

CAG also noted that Gujarat State Petronet Limited’s decision with regard to the gas transmission agreement with Torrent Power Ltd (TPL) for its Sugen power plant in Surat resulted in undue benefit to TPL worth Rs186 million.

On benefits to the Adani group, the CAG has wondered how Mundra Port in Kutch district of Gujarat could be turned into Adani Port.

Pointing out that the Mundra Port was actually planned under the join sector of public-private partnership, it said the Gujarat government did not follow competitive bidding process while divesting its stakes in the Mundra port.

The Mundra port was jointly owned by the Adani Port Ltd and Gujarat Ports Infrastructure Development Company Ltd, a special purpose vehicle of the Gujarat Maritime Board.

mahesh@khaleejtimes.com