Not ` 292 cr, State has to pay Reliance ` 361 cr as on date

SURAJ NANDREKAR

suraj@herald-goa.com

PANJIM: The State government on Thursday received a second jolt in the Reliance Infra case as after the Arbitration Tribunal, the District Court also ruled in favour of Anil Ambani-led Group. While it is being talked that the State has to pay Rs 292 cr as pending bill, Herald investigations reveal the debt to the State is far higher than that.

Investigations reveal that the State, as on Thursday (Sept 12, 2019), had to pay Reliance a whopping Rs 361 cr. Inquiries further reveal that the debt is increasing by Rs 13 lakh every day.

The case so far

Reliance Infrastructure had won an arbitration award of Rs 292 crore against the government of Goa in a case relating to non-payment of dues for electricity supplied by the former. The matter went into arbitration when Goa delayed payments to Reliance Infrastructure for power supplied from its 48 megawatt-Goa Power Plant in Sancoale.

The tribunal had also ordered payment of interest at 15 per cent per annum on the total award amount if Goa fails to pay the entire award amount by the deadline. The Arbitration Tribunal, on February 16, 2018 ordered the government of Goa to pay Rs 292 crore to Reliance Infrastructure by April 15.

The company had then said that the total outstanding dues, along with interest, as on October 31, 2017 amounts to Rs 278 crore. The tribunal has also awarded Reliance Infrastructure interest from October 2017 till the date of the award, which would be another Rs 14 crore.

How it started?

Initially, when Reliance’s 15-year contract came to an end in August 2014, the outstanding was Rs 119.32 cr as principle backlog. As on 16/2/2018, the amount due with compounded interest was Rs 292.18 cr.

However, as on date, when the North District Court dismissed State government’s petition, the outstanding has accrued to Rs 361 cr. Shockingly, the interest part itself is Rs 241.68 cr as the principle was just Rs 119 cr. Sources revealed that the daily interest Rs 13 lakh and monthly of Rs 3.9 cr.

Faulty Agreement?

The Congress-led government in 1999 signed the Power Purchase Agreement (PPA) with the Reliance Infra, which, sources reveal, was ‘scandalous’. Interestingly, the PPA was signed during the time Mauvin Godinho was Power Minister, and is now Panchayat & Transport Minister in Dr Pramod Sawant government.

“There was a clause which said that the State could pay 15 per cent interest in case it defaulted on any payments. As per the PPA, the State was to buy 48-MW from Reliance,” sources revealed, adding, “The rates were also very steep as against the national grid.”

The rate of energy was based on the varying prices of fuel and dollar exchange rate as was agreed to by the Goa government, which was upheld by the tribunal, they said.

Parrikar saved further damage?

In 2002 when Manohar Parrikar took over the reins of the State, citing the huge costs, he reduced the power intake from 48 MW to 19.8 MW. “This move has saved government at least Rs 1,200 cr, otherwise the debt would have been nearly Rs 1,600 to 1,700 cr,” sources said.

Settlement only way out?

Sources reveal that with Reliance Infrastructure now winning two cases – one in the Arbitration Tribunal and one in the District Court – it is unlikely they would agree for an out of court settlement. However, that is the only way out for the State government, sources said.

“In the past some officials and advocates have misguided the government that the State could win the case. However, the fact is the Reliance case is water-tight, we will only waste money on advocates and litigation if we go in further appeal,” sources said, adding, “The best way out is and out of court settlement.”

State to file appeal

Advocate General Devidas Pangam confirmed to Herald that the State will appeal in a higher court. Power Minister Nilesh Cabral also said that this will definitely dent the State coffers but his department will file an appeal. Cabral also said he had always suggested an out-of-court settlement, which has gone unheard.