Lavalin (renovate and modernise three hydroelectric power projects) deal violated Central norms: CBI

The Central Bureau of Investigation (CBI) told its special court here on Monday that the State government had contracted SNC- Lavalin, a Canadian firm, to renovate and modernise three hydroelectric power projects in the State in 1997 at a fixed price rate in contravention of repeated Union government directions, since 1993, to follow the process of competitive bidding in the implementation of power projects to ensure transparency and fair play in such deals.

Opposing the discharge pleas of the accused in the case, notably that of Communist Party of India (Marxist) State secretary and former Electricity Minister Pinarayi Vijayan, the CBI said the Union government had written to all State governments in November 1993 and again in January 1995 to shun the practice of unilaterally entering into Memorandum of Understanding (MoU) with private players while implementing power generation projects “in the future.”

In a letter in April 1994, the Union government had warned the State government against pursuing the MoU route for power generation projects. The Kerala State Electricity Board (KSEB) could “not convincingly” explain why it gave the go-by to the Centre’s directions while entering into a contract with SNC-Lavalin to modernise Panniyar, Sengulam, and Pallivasal hydroelectric projects.

The CBI accused the suspects of splitting the contract with SNC-Lavalin into three components to circumvent the Central Electricity Authority’s direction that any power generation project that entailed a capital expenditure of more than Rs.100 crore required its clearance.

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