The Teesta River in Sikkim. Native individuals blame the Sikkim authorities for giving permission to construct a number of megadams on the Teesta River basin.
| Picture Credit score: RITU RAJ KONWAR
In a Cupboard assembly held on February 2, 2024, the Sikkim authorities determined to divest its total 60.8 per cent stake in Sikkim Urja Ltd (SUL), the corporate that owns the Teesta III venture, in favour of Greenko Energies Personal Ltd, a personal associate within the venture.
Sikkim Chief Minister Prem Singh Tamang justified the choice on the grounds that it was finished to keep away from a debt entice. The earlier Sikkim Democratic Entrance (SDF) authorities had taken round Rs.3,500 crore as mortgage from varied sources with a purpose to fund the Teesta III venture. On February 5, Tamang introduced within the Legislative Meeting that his authorities had determined to forego the stake within the firm and that Sikkim had turn out to be utterly debt-free with the sale of its stake in Teesta III.
On February 3, 2024, precisely 4 months after catastrophe struck the venture on the night time of October 3-4, 2023, Sikkim’s Energy Division reportedly issued a discover saying the Cupboard resolution to disinvest its total stake in SUL. In keeping with this discover, Greenko would take over the Sikkim authorities’s mortgage—which stood at Rs.2,895.46 crore—from Energy Finance Company. It might additionally take over the principal part of one other mortgage taken from Sikkim Financial institution Ltd amounting to Rs.184.28 crore.
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Nevertheless, the choice to divest the federal government’s stake was taken at a time when SUL had dues of roughly Rs.3,500 crore to be recovered from energy distribution corporations in Punjab and Haryana. The SUL was not a loss-making firm–its annual studies point out that it had been recording a wholesome revenue since 2021-22. Though it had misplaced a web quantity of Rs.212.40 crore in monetary yr 2020-21, as per the audited monetary statements, SUL made a web revenue of Rs.230.41 crore in 2021-22. The online revenue elevated almost sixfold to Rs.1,270.19 crore in monetary yr 2022-23.
The corporate’s annual monetary assertion for 2022-23 reveals it had obtained a time period mortgage at floating charges of curiosity from one other supply as effectively: the general public sector energy tasks financing firm REC Ltd, other than Energy Finance Company. The corporate had a complete excellent steadiness of Rs.7,897.73 crore to be paid to those two monetary establishments on the finish of monetary yr 2022-23: it had a steadiness excellent of Rs.3,942.97 crore with REC Ltd whereas a steadiness of one other Rs.3,954.76 crore was as a result of Energy Finance Company as of March 31, 2023.
The annual report information: “Through the FY 22-23, Firm [SUL] has made prepayment of Rs 1,500 Crores to each the Lenders equally (i.e. Rs 750 Crore every) in direction of the excellent Principal Time period Loans over and above the due common funds.” In a vital assembly held on December 6, 2023, to deliberate on the prospects of reviving the hydroelectric venture, the Union Ministry of Energy really useful the fast-tracking of Rs.3,500 crore that the distribution corporations of Punjab and Haryana owed the Sikkim authorities. This was later conveyed to the Sikkim authorities formally by a letter dated December 26, 2023.
Method of disinvestment
It’s not identified whether or not the Sikkim authorities wrote to the distribution corporations and whether or not their responses, if any, had been mentioned within the Cupboard assembly earlier than the federal government finalised the sale of its stake in SUL. It’s also not identified whether or not the disinvestment resolution was preceded by an impartial evaluation of the losses and damages precipitated to the venture. In keeping with sources near the federal government, it was dropped at the discover of the Cupboard, in a gathering held on December 22, 2023, that the State authorities had been unable to safe Rs.4,000 crore by means of mortgage waiver, subsidies, and help from the Central authorities and the 2 monetary establishments with a purpose to rebuild the venture.
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Tamang has argued that the earlier SDF authorities had entered into an settlement with Greenko up to now in accordance with which the sale of government-owned stakes, if any, in future, can be in favour of the most important personal associate in SUL. Reportedly, Greenko was attempting to accumulate Sikkim authorities’s stake in SUL even in 2020-21, a yr wherein the corporate had incurred important monetary losses. It had additionally been attempting to accumulate shares from different minority companions of SUL.
The disinvestment passed off with out aggressive bidding or invitation of expressions of curiosity, which might have maximised income for the federal government. It was additionally introduced through the run-up to the 2024 Lok Sabha election, which has additional raised eyebrows.
Ayaskant Das is an impartial journalist and author primarily based within the Nationwide Capital Area.
