New Delhi: The government has decided to hold off from cancelling the controversial Technoprom Exports (TPE) contract ahead of a visit by Prime Minister Manmohan Singh to Russia, but the Union power ministry and NTPC Ltd are insistent that the contract be revoked.
The decision to set up a panel of power ministry and NTPC officials to examine the proposal by the cabinet committee on security (CCS) on cancelling the contract was taken after two meetings on Thursday and Friday, the second attended by finance minister Pranab Mukherjee, home minister P. Chidambaram, power minister Sushil Kumar Shinde, national security adviser M.K. Narayanan and NTPC officials on Friday. The meetings took place before Singh left for Russia on Sunday morning.
“Everyone was opposed to giving what Technoprom is demanding,” said a senior cabinet minister, who did not want to be identified. “This can’t be done and is impossible even as (Russia’s Prime Minister Vladimir) Putin himself has asked for a resolution.”
“India will not convey any final decision to Russia on Technoprom during this visit,” said another cabinet minister, who also declined to be identified.
The dispute has become a test of the country’s ability to balance commercial and diplomatic interests as Russia is holding up India’s quest for a stake in the Sakhalin-3 crude oil fields until the dispute over the boiler deal is resolved. Russia’s stand was spelt out by Putin during petroleum minister Murli Deora’s visit to Russia in November 2008.
Singh doesn’t want to rock ties with Russia as he looks to sign a civil nuclear agreement with the nation over technology and uranium supplies during his visit.
Mint had reported on 7 September about the issue being taken to CCS for resolution. The CCS proposal, if approved, could lead to TPE’s blacklisting and the termination of its contract to supply boilers to NTPC’s 1,980MW Barh project in Bihar. “While the CCS decision is yet to be taken, we have to protect NTPC’s interest,” said a top power ministry official, who did not want to be identified because of the sensitive nature of the matter. “We have moved the note for the order cancellation.”
While the contract is worth around Rs2,066 crore, Technoprom Exports, under investigation for payoffs it allegedly made to secure the order, is demanding an additional Rs1,700 crore citing higher steel prices, which NTPC is unwilling to pay.
“We are doing everything to protect our interests. In no way will we allow our commercial interests to suffer,” said a senior NTPC executive who did not want to be identified. Questions emailed to TPE’s India representative, the Russian embassy in New Delhi and the Indian foreign ministry spokesman Vishnu Prakash remained unanswered till late Monday evening.
In an earlier emailed statement to Mint, the Russian embassy’s media and culture attaché said: “Countries protect interests of their state and private companies abroad and the Russian Federation” is no exception.
NTPC is India’s largest power generator with a capacity of 30,644MW. The delay in the Barh project could hit its plans to raise capacity to 50,000MW by 2012.