mangalore today

Contractor profits by Varahi project delay, says probe.

Mangalore Today News Network

June 21 2018: A Upalokayukta enquiry report, on irregularities in Varahi irrigation project, has stated that a private mini hydel project has made a profit by selling electricity to the state government using the water from the incomplete Varahi project in Udupi district.

The report said that under the 38-year-old Varahi project, even a kilometre of canal work was not completed. The delayed project has caused a loss of Rs 100 crore to the state exchequer, the report stated.

Interestingly, the construction work of right bank canal (RBC) of the project is being carried out by the very contractor who owns the mini hydel company. “As long as the Varahi project is delayed, the mini hydel project would get sufficient quantity of water to generate electricity and make a profit,” the report stated.

Based on a complaint about irregularities in the project, the then Upalokayukta Justice Subhash B Adi held an enquiry and submitted the report in March 2018.

Even as the irrigation project was on, the state government sanctioned 12 MW minor hydroelectric power plant in favour of Shamili Hydel Power Project Pvt Ltd in 2005. In 2006, the government sanctioned an additional 6 MW in favour of the said company.

Since then, Mangalore Electricity Supply Company (Mescom) has paid
Rs 49.89 crore to this company towards the purchase of electricity. The enquiry report stated that the private hydel power company has not paid a ‘single paisa to the Irrigation Department for utilisation of water as royalty, and no contract has been entered into so far’.

“The project was mainly for irrigation purpose. Yet, the idea of installation of the hydroelectric project was proposed and given importance. The owner of the hydel project, G L Shankar, is also one of the tenderers for construction of RBC. Even after spot inspection held by me (Justice Adi) in February 2018, land acquisition proceedings to a major extent was still pending and not handed over to the project. As long as the Varahi project is delayed, the mini hydel project would get sufficient quantity of water so as to generate electricity and make profits,’’ Justice Adi stated in his report.

One of the contractors in Varahi project and director of Shamili Hydel Power Project Pvt Ltd G Shankar said as per the agreement his company had only made the payment to the forest department. “It was a lease we entered into with Neeravari Nigama and Mescom for 30 years. We have also made huge investments. The water we use is only during the monsoon and when the river flow is lean we are not allowed to use the water for generation of electricity.’’