Govt decision to cancel agreement with power company kicks up row

KOCHI: The government’s decision to cancel the agreement it inked with GJ Eco Power Pvt Ltd for constructing a waste-to- energy plant at Brahmapuram is snowballing into a major controversy. Ruling councillors in the corporation said the government has some hidden agenda behind the cancellation of the project.  “When GJ Eco Power approached the corporation for mortgaging its 20 acres of land to find the fund for the project, the corporation turned it down. However, the state government directed the corporation to sign a lease agreement with the firm on the proposed waste-to-energy plant,” said a councillor not wishing to be named.

“The same government has now cancelled the agreement just before starting the construction of the plant. If the project is launched during the UDF tenure, it will help the front to gain some support in the upcoming polls. The LDF  government doesn’t want it,” he saidInterestingly, the government itself carried out the tendering process and gave the licence required for execution of the project. 

“KSIDC is now being asked to take steps to float a Request for Proposal for the selection of a suitable concessionaire to set up a waste-to-energy plant at Brahmapuram,” he said.Though the government says the company’s failure to take fruitful steps to achieve financial closure, as mandated in the concession agreement, resulted in terminating the agreement, the company dismissed the claim.

“Kochi Corporation has not handed over the land even after four years. The company can approach RBI for financial assistance only if the land is given on lease. The government had made it clear in its order and the company had given only an offer letter in this regard. The government had not mentioned why the corporation has not signed the lease agreement,” said a statement by GJ Eco Power.

It is learnt that the government had decided to cancel the agreement without hearing the company. 
“The company had given the application fee to the government and spent around `35 crore for engineering design to run the power plant. Now the government has raised doubts about the financial situation of the company which is not clear. If there was any doubt regarding the financial situation, why did the government remain silent for the past four years,” the company asked.