INDIA: Accusation of foul play in power tenders for Punjab mills

Published: 06/19/2017, 1:45:49 PM

Punjab Congress leader Sukhjinder Raj Singh ‘Lalli' Majithia on Saturday accused former Akali minister Bikram Singh Majithia of complicity in INR9.15 billion (US$142 million) "scam" in allocation of power tenders related to eight of the nine sugar mills in Punjab, according to India's Hindustan Times.

Addressing a press conference, Lalli alleged gross irregularities and nepotism in allocation of tenders for upgrading, modernisation and installation of cogeneration plants in the eight mills, resulting in huge losses to the state exchequer. Cogeneration plants help generate electricity and useful heat at the same time.

"The total estimated loss from 2010/11, the year in which these projects should have been operational, till now is INR9.15 billion," said Lalli. "The losses will continue to pile up till the time co-generation plants are made operational."

The mills not only failed to earn INR6.68-billion revenue, but also suffered losses of INR2.45 billion over a period of seven years on account of salaries, repair and maintenance, fuel and purchase of hydel power, said Lalli, on the basis of Sugarfed documents.

Alleging the "scam" rendered cooperative sugar mills across the state incapable of being self-sustaining, Lalli demanded probe by a special investigation team (SIT) into it.

Sugarfed, apex body of cooperative sugar mills in the state, had floated the tenders for the work on behalf of the eight mills in 2008.

Lalli alleged Saraya Industries Limited (SIL), a family unit of Bikram Singh Majithia, "misused" his official clout and obtained the contracts for four mills directly and four in the name of another company, A2Z.

"SIL bagged orders for Nawanshahr, Ajnala, Batala and Gurdasprur and A2Z for Morinda, Budhewal, Nakodar and Fazilka," said Lalli. "Tenders received from SIL were conditional and not as per terms of notice inviting tenders (NIT) and hence should have been rejected there and then. The earnest money deposited by these eight mills amounting to INR3 billion should also have been forfeited."