This is no small amount and Goa cannot conceal the fact that paying this would set it way back financially. As the Power Minister said, there is no other option but to fight this in court, and he has been backed by the Chief Minister who also said the same. And as the Advocate General said, Goa will have to prepare a stronger case when it appeals. A similar statement had been made by the then Power Minister Pandurang Madkaikar who said in February last year that Goa had strong grounds to win the appeal.
There is a tenuous link here that makes one wonder whether the State’s case was weak in the first place. If indeed it was, why did Goa have to challenge the initial amount it had to pay, which was quite less compared to the huge amount it is now saddled with due to the interest calculations.
The case appears to be pretty straightforward. Reliance Infrastructure had won an arbitration award of Rs 292 crore against Goa in a case relating to non-payment of dues for electricity supplied by the company from its 48 megawatt Goa Power Plant in Sancoale. The matter went into arbitration when Goa delayed payments to Reliance Infrastructure for the power supplied. The Arbitration Tribunal, on February 16, 2018 ordered Goa to pay Rs 292 crore to Reliance Infrastructure by April 15, and also ordered payment of interest at 15 per cent per annum on the total award amount if Goa failed to pay the amount by the deadline.
The outstanding dues claimed by the company, along with interest, as on October 31, 2017, amounted to Rs 278 crore, but to this amount was added the interest awarded to Reliance Infrastructure from October 2017 till the date of the award, which was another Rs 14 crore, making it Rs 292 cr that Goa had to pay. Reliance Infrastructure had argued that the rate of energy for the period from June 2013 to August 2014 was based on varying prices of fuel and dollar exchange rate as was agreed by the Goa government. This argument was upheld by the tribunal. Really, if the rate of energy was agreed upon as to be based on varying prices of fuel and the dollar exchange rate, then the State has a weak argument.
More importantly, in February 2018, when the tirbunal gave its award in favour of Reliance Infrastructure, Madkaikar had announced that the State would order an inquiry into the serious lapses in the Reliance Infrastructure contract. He had said that the contract signed in 1999 was for a period of 15 years and had expired in August 2014, and that a review meeting had found some serious lapses. What happened to that inquiry? Was it ever instituted, and if it was, what did the report say? And, if the inquiry wasn’t instituted, what was it that held the government back? These are questions that become relevant with the government losing the appeal, and now seeking to file another appeal in another court.
Goa is now in a situation where it has to pay out Rs 292 cr for power utilised five years ago unless the courts come to its rescue. Adding the interest it comes to Rs 361 crore and is increasing daily. The State had ample time to get its act together if it was really serious in making a strong case in the appellate body. It now has six weeks to strengthen its case, but will it do so? Perhaps if the inquiry had been conducted it could have helped. But now, we’ll never know.
