And Quiet Doesn’t Flow The Teesta

Teesta - a NatConnect Pic

And Quiet Doesn’t Flow The Teesta

Hydel Project Flooded With Controversies



When it comes to courting controversies, no company can perhapd beat Teesta Urja Limited (TUL), a Special Purpose Vehicle (SPV) executing the 1200 MW Teesta Stage-III hydropower project in the tiny state of Sikkim.

From bagging the project bypassing any tender, changing the shareholders including the initial promoters, without intimation to the Sikkim government, to depriving the 26% equity share of the government in the project, TUL has done it all.

It even received PE funding from offshore entities and was run for several years with controlling equity by Asian Genco Pte, a company which was not even in existence when the controversial MOU for TUL was signed.

Even when it declared its commercial commissioning (COD) in 2017, it did so in a highly controversial manner, as it was not having the requisite power evacuation and transmission line in place. This started the process of sustaining losses as it could not start operating to its full capacity, a process it is still continuing (though for a different reason, there are restricted takers of costly hydropower as solar or wind power is available at cheaper rates, as compared toRs.6 per unit rate of TUL) and has become a huge debt-ridden entity on the Sikkim government.

Recently, a decision of the TUL board to move for restructuring and refinancing of its huge debts by appointing the services of a private finance company from Mumbai, seemingly at a high service fee, whereas, it had a reasonable and more reputed alternative option in SBI capital markets Limited, is another new to its list of controversies.

The Genesis: The hydropower boom in Sikkim started during the reign of former Chief Minister Pawan Chamling under his Sikkim Democratic Front (SDF) party in 2000.

The development of projects like a cascade on River Teesta, including Teesta Stage I 320 MW, II 480 MW, III 1200 MW, IV 520 MW, V 510 MW and VI 500 MW, was conceived and sanctioned during his tenure, with approval of the Central Water Commission (CWC) and the Central Electricity Authority(CEA).

Teesta Stage I and II were scrapped by the government due to stiff resistance by the project affected people and economic unviability. Teesta Stage V is operational and being run by NHPC, while Stage VI has been awarded to NHPC after Lanco Group faced insolvency while developing it. Stage IV at Dzongu, a protected area is under NHPC yet again but stuck up due to protests and FC –II clearance.

Perhaps, the most controversial and loss-making project from project allotment till commissioning, has been the Teesta Stage III 1200 MW.

A tender for a 1200 MW Teesta III hydropower project which received bids from reputed energy sector companies, was rejected by the Sikkim government. A consortium of Cosmos electric company was to be issued the letter of intent (LOI) for the project and were about to sign the MOU.

However, under very suspicious and frivolous reasons, the LOI to Cosmos was cancelled by the Sikkim government and a new LOI issued to a newly formed inexperienced consortium of Athena group. Bypassing tender, Athena signed the MOU with the Sikkim government. Years after signing of the MOU, several of the initial consortium partners exited without intimation or ascribing reasons, new entrants were brought in as equity partners in the project without intimation to the joint venture (JV) partner, the Sikkim government. Many of these new companies had roots in tax haven countries like Singapore, Mauritius etc.

The Centre’s rule of allowing the MOU route for allotting projects above $100 million project cost says that the public or state sector needs to hold controlling share (51%) in the Joint Venture (JV). Thus, Teesta Urja Limited or TUL was formed as a special purpose vehicle to sign the MOU and execute the project.

In stark violation, the Sikkim government initially owned only 26% equity in the project backed by questionable practices and quid-pro-quo benefits taken by the decisions of political economy.

The Athena consortium is linked to TV Vijay Kumar, an aide of a famous politician from Andhra Pradesh. This nondescript company was formed a little before the tender process.

The Athena consortium memorandum and articles of association, share holding pattern, and profile of initial promoters their background check details out the corruption which was facilitated by the power secretary at the government of India, power minister, Sikkim government officials, power brokers, and corporate entities.

The Government of India (GoI) has specified that all private hydropower projects above Rs 100 crore have to be awarded through the route of competitive bidding. The only exception to this guideline is if the company selected through the process of issuing a Letter of Intent and then a Memorandum of Understanding is a joint venture company in which the State Electricity Board or a Public Sector Unit holds a majority stake of 51 percent or higher.

This is clearly not the case with Teesta Urja Limited. This private company was allotted the hydropower project not through competitive bidding but through an arbitrary process where it was favoured above other companies.

This means that almost each and every official clearance and money that the project has received from the Government of India has been obtained under false pretences. TUL has illegally asked for and has received from the Government of India vital clearances like the Techno Economic Clearance(TEC) from the Ministry of Power, Environment and Forest Clearance from the Ministry of Environment, land from the GoS and Rs 4,560 crore from the Rural Electricity Corporation and 10 nationalised financial institutions.

The “Terms” of the MOU are loaded in favour of the independent power producer( IPP.) in this case TUL. Which even the Comptroller and Auditor General of Sikkim criticised as they “favoured the independent power producers at the expense of Exchequer”

Some of the politicians who are linked to this project are former chief minister of Sikkim, Pawan Chamling and Sushil Kumar Shinde, the Governor of Andhra Pradesh from October 2004 to January 2006 and Minister of Power from then until 2011-2012.

“The arbitrary allotment of hydropower projects during the tenure of the Sikkim Democratic Front(SDF) government of former chief minister Pawan Chamling without tender and without the Sikkim government holding 51% equity as mandated by the Government of India(GOI), is highly illegal and we have been protesting against it , even filed a PIL challenging it”, said Tseten Tashi Bhutia, a former MLA and convenor of the Sikkim Bhutia Lepcha Apex Committee(SIBLAC), an NGO fighting for indigenous rights and against hydro projects in Sikkim.

The bureaucrats who were instrumental in getting the project allotted and facilitating clearances and subsequent funding are RV Shahi, the former Power Secretary GoI, Tantra Narayan Thakur the CMD of PTC India Limited (an officer from the Indian Accounts and Audit Services, GoI), DD Pradhan, the then Principal Chief Engineer cum Secretary Department of Energy and Power GoS, Pema Wangchen, the Chief Engineer Department of Energy and Power GoS and Dr S Narayan, a former secretary to the Government of India.

RV Shahi was the Secretary to the GoI in the MoP from April 2002 to January 2007. It was during his tenure that the CEA gave the TEC to TUL.

An interesting fact is that after retirement RV Shahi was the Chairman of engineering Consultancy Company called Energy Infratech Private Limited (EIPL). Who owns EIPL? No one other than Asian Genco.

The original promoter of TUL is a nondescript company called Athena Projects Private Limited (APPL) and the businessmen linked to this company are TV Vijay Kumar, promoter of Asian Genco Pte. Ltd. a Singapore based company and now majority owner of TUL, Krishna V Tatineni, director in Asian Genco Pte. Ltd. and a director in many Athena affiliated companies, Jayaprada Putrevu, director in Asian Genco Pte. Ltd., YV Apparao, the then MD of TUL, MS Ramakrishna, founder director of Karvy Financial Services, and MSP Rao, formerly with Rashtriya Chemicals and Fertilisers and Reliance Industries, Krishna V Tatineni.

The following were listed as members of Athena consortium:

1. Athena Projects Pvt. Ltd.

2. Larsen and Tubro

3. ICICI Securities

4. PTC India Limited

5. IL & FS

6. Karvy

7. Halcrow

The Memorandum of Articles of Association shows the following as subscribers:

1. S Goplakrishnan, New Delhi: 100 shares

2. Mulakala Surya Prakasha Rao, New Delhi: 100 shares

3. Pina Potu Durga Prasada Rao, Delhi: 100 shares

4. Rajendra Singh, New Delhi: 100 shares

5. Hashu Pessumal Bhagat, Hyderabad: 100 shares

6. Dr. Chunchu Raghuvera Prasad, Gurgaon: 100 shares

7. Vusirikala Venkata Badareenarayana: New Delhi: 100 shares

8. Athena Projects Private Limited, New Delhi: 49,3000 shares

The total number of shares listed was 50,000 and APPL held 49,300. Not one share was in the name of the government of Sikkim. Let alone the 26 percent equity stake of the GoS in Teesta Urja Limited, not even the name of the GoS was mentioned in the document.

The same applies for the rest of the companies listed and who were supposed to be partners in the consortium. They had all mysteriously vanished from the Memorandum of Articles of Association of APPL.

There is also a clause in the MOU to protect the commercial interests of the GoS that states: “The balance 74 % (Seventy Four percent) of equity shares of the Company shall be subscribed by Athena. The Share holdings of each constituent of Athena and their responsibilities shall be communicated by the Company to the Government of Sikkim at the time of Financial Closure. The Company shall not change the constitution of the Athena consortium without prior permission from the Government. If the Company fails to submit the share-holding agreement with the members of the Athena at the time of Financial Closure, then the Government can terminate this agreement.”

If there is a violation of this clause the GoS can unilaterally terminate the agreement. However, the existence of this clause has had no restraining effect on APPL, who has violated this clause at least once when it awarded 50.9 percent of the equity of TUL to Asian Genco Pte. Ltd  (AGP).

It would have been impossible for AGPL to be listed either in the LoI or the Memorandum of the Articles of Association as it was incorporated only in January 2007 in Singapore. Thus, it is not a member of the Athena Consortium as specified in the MoU. The question therefore is whether or not the sale of equity to AGPL is illegal?

The Teesta III was commissioned in 2017 after huge cost and time overruns, amid once again illegalities related to transmission lines not being constructed etc. It sustained at least 3,000 Cr losses in 2017-18 and since then is still in losses. It has an outstanding long-term debt in the tune of INR 10,111 plus Cr.

Pic courtesy: ACT

Asian Genco in and out: For the uninitiated, a Singapore-based and Mauritius controlled fund backed by Morgan Stanley and Goldman Sachs secretly took over a major hydropower project, Teesta Stage III of 1200 MW executed by a Special Purpose Vehicle (SPV), Teesta Urja Limited or TUL, in north-eastern Indian state of Sikkim.

Enter Asian Genco Pte. It did it by manipulating processes, flouting laws of equity subscription and depriving the state government of majority ownership for a while, required by Indian law.

The initial Athena Consortium members and their share holding pattern at the time of MOU was all changed without knowledge of the Sikkim government and Asian Genco a Singapore based and Mauritius controlled entity, took the controlling share in the JV all without the knowledge of Sikkim government.

In 2010, a Singapore-based, Mauritius-controlled entity called Asian Genco took the controlling share in the joint venture without the Sikkim government knowing about the deal.

Asian Genco Singapore purchased the stakes of other minority shareholders of the Athena consortium like L&T, Karvy, Halcrow, ICICI security etc. 

Asian Genco  Singapore  was incorporated in  2007 , it could  get a  controlling  share  in Teesta Urja limited ,  because  till about 2011-12,  the share  subscription  agreement between Teesta urja limited  and Sikkim  government  was not  executed  and Sikkim  government  stake  of 26% equity  was being  delayed by  Teesta urja limited in  one or the  other  pretext.

It was only after the Sikkim government had to get a court order that it was given the 26% equity by Teesta urja limited. Though the GOS signed the Memorandum of Understanding (MOU) with a consortium headed by a nondescript company   Athena projects private limited in February 2005, as late as in July 2012, it had to literally fight to get its share of 26% equity for which it had to borrow Rs.296 crores.

In March  2010,  private equity (PE) firms led by General Atlantic, Goldman Sachs, Morgan Stanley, Norwest Partners, Ashmore Investment and Everstone Capital invested close to $425 million in Singapore based infrastructure firm Asian Genco, through Mauritius based Varuna Investments as the holding company, having 100% preference shares but without voting rights.

In 2014, the dispute between PE investors and Asian Genco promoter T. V. Vijaykumar took a nasty turn in their business relations. Hyderabad police stated that Cobalt Power, a company owned by Vijaykumar, had invested Rs 200 crore in a Seemandhra thermal power project, promoted by Asian Genco.

As Cobalt did not get back its money or get any share in the company, it approached the local court. The court directed the police to probe the cheating complaint against all directors of Asian Genco, which included the nominees of the PE entities.

The PEs had in their part moved for arbitration proceedings in Singapore courts for management control and to recover their funds.

Asian Genco’s projects have been delayed considerably and face massive cost overruns. Allegations of bending of rules to get the Teesta Stage-III 1200 MW project from the government of Sikkim,  ensuing PIL’s and an earthquake in 2011, had further delayed commissioning. Its Andhra project faced opposition from locals over land acquisition issues.

Asian Genco’s promoter T. V. Vijaykumar is known to be in the inner coterie of businessmen close to Jagan Mohan Reddy, currently Chief Minister of Andhra Pradesh, son of the late Andhra chief minister, Y S Rajasekhara Reddy.

According to credit rating agency ICRA, the present share-holding composition of TUL is as follows:

          Government of Sikkim(GOS) holds 60.08%

          Asian Genco Pte Singapore  holds 24.98%

          Power Trading Corporation India Limited(PTC) -5.62%

          Indus Clean Energy (India) Private Limited-5.18%

          Athena Projects Private Limited-2.72%

          APPL Power Private Limited-1.42%

Surprisingly, most original shareholders mentioned in the letter of intent (LOI) and the MOU such as L&T, ICICI Securities, Karvy, Halcrow and even APGENCO are missing, nor were they ever there!

GOS is now the owner of TUL with 60.08% equity, though as per MOU it was to be only a 26% share-holder, but circumstances forced it to borrow first Rs.296 crores for 26% equity, at that time Asian Genco held control with 50.9% equity and then in excess of Rs.3,000 crores for buying controlling shares from salvaging the project from liquidation when Asian Genco and their PE investors were in legal battles.

Athena Projects Private Limited is a minority holder now, though they are supposed to be project proponents at LOI and MOU time, APPL Power Private Limited has some people from Athena as their directors.

Indus Clean Energy India Private Limited is a nominal share-holder, but when and why it bought shares is not known. Interestingly, it is a subsidiary of a foreign company.

PTC India has a nominal share holding presence, which has progressively reduced over time, though it has been an initial promoter within Athena.

The final exit of Asian Genco was perhaps scripted by the decision of Singapore’s GIC and Abu Dhabi Investment Authority backed Greenko Group’s decision to buy a 40% stake in the Teesta Urja Limited, in the first phase pegged at an investment of $200-250 million(Rs.1400-1750 crores) from Singapore based Asian Genco.

In the Sikkim Assembly session, the new Chief Minister Prem Singh Tamang (Golay) had mentioned a per capita debt of 1.5 lakhs per Sikkimese person and an overall debt of Rs.16000 crores on the exchequer. Golay said he inherited a debt burdened government (due to hydro power loans and losses) left by his predecessor Pawan Chamling, who ruled the State for 25 years.

Out of this huge debt burden, hydro projects where the government held or was supposed to hold between 11-26% equity, TUL has the largest share of debts, mostly from Rural Electrification Corporation (REC), and Power Finance Corporation (PFC).

An amount of Rs 4,600 has been raised by Teesta Urja Limited from the Rural Electrification Corporation and 10 other nationalised corporations and banks. They are: REC (Rs 2,100 crore); Housing and Urban Development Corporation Limited (Rs 545 crore); India Infrastructure Finance Company Limited (Rs 500 core); Punjab National Bank (Rs 500 crore); Canara Bank (Rs 265 crore); Bank of Baroda – don’t they ever learn? (Rs 200 crore); and Oriental Bank of Commerce, Life Insurance Corporation of India, United Bank of India, Dena Bank have given Rs 100 crore each and Punjab & Sind Bank has lent Rs 50 crore.

REC had lent Rs.4600 crores leading a consortium of ten nationalized banks in the early years of TUL, which were investigated to be shown as a charge in the account of Asian Genco Singapore.

A recent CAG report has revealed losses and increased borrowings (from Rs. 2,781.35 Cr in 2018-19, to Rs. 3,006.74 Cr in 2019-20) by Sikkim Power Investment Corporation Limited (SPCIL) in Sikkim.

Despite being aware of the poor financial performance of Sikkim Power

Investment Corporation Ltd. (SPICL), the State Government extended (December 2018) a revolving guarantee of `Rs. 225.00 Cr to Power Finance Corporation on behalf of the Company, the CAG report said.

Further, the CAG report pointed out that the major contributors to the accumulated losses during 2019-20 , were Teesta Urja Limited (`Rs. 1,169.47 Cr) and Sikkim Power Investment Corporation Limited (`Rs 1,000.30Cr.

“Destructive hydropower projects like Teesta Stage IV and Panan  in Dzongu should be  scrapped at any cost”, said Sonam Gyatso Lepcha, former power minister and former legislator from Dzongu, who after quitting his former party the SDF has become a strong opponent to projects in the Lepcha heartland.

Enter NHPC: The remote and tranquil Dzongu valley in North Sikkim resonated with strong protests against an issue that dates back over a decade. They are protesting   the proposed 520 MW (MegaWatt) Teesta Stage IV hydropower project developed by the state-owned National Hydro Power Corporation (NHPC).

The Lepcha tribe from Dzongu, defined as a particularly vulnerable tribe, have been very vocal in protecting their ancestral land from what they see as an onslaught of hydropower projects and dams since 2007.

“Most of the allotted or commissioned hydropower projects in Sikkim stink of corruption. We are protesting against the ones bent on a social, cultural genocide of the indigenous people, apart from the fragile ecology. But the decisions of political economy are tough to fight”, said Gyatso Lepcha of the Affected Citizens of Teesta, an NGO fighting for the Lepcha tribe of Dzongu.

But it was the SIA (Social Impact Assessment) report for the Teesta Stage IV evaluation expert group that was notified by the Land Revenue & Disaster Management Department of the Sikkim Government, which triggered strong protests from the Affected Citizens of Teesta (ACT) and the Save Dzongu groups, both NGOs representing the locals. This notification has come despite an ongoing writ petition challenging the SIA report in question.

Teesta IV, in short, attempts to dam the last stretch of the free-flowing River Teesta. It has been severely dammed in its brief journey of about 175 km from its glacial source in North Sikkim’s cold desert, through its journey in Sikkim. The Teesta flows through Sikkim and West Bengal before finally pouring into the Bay of Bengal in Bangladesh.

The Stage II Forest Clearance (FC) for the project is still due, even as the litigations in the High Court and Supreme Court remain alive.

In 2002, the Sikkim Power Development Corporation Limited (SPDC) had issued a Letter of Intent (LOI) in August 2002 to the consortium of M/s Amalgamated Transpower India Limited (ATPIL) and Karnataka Power Corporation Limited (KPCL), for drawing up an agreement for the development of two projects, Teesta Stage IV (495 MW) and Teesta Stage VI (440 MW).Karnataka, however, did not plan to draw any power and KPCL was just that it was part of the consortium with ATPIL New Delhi who were looking to develop projects in Sikkim.

The Stage IV project was subsequently awarded to NHPC in March 2006. As on August 31, the Central Electricity Authority (CEA) of the Ministry of Power stated that it concurred Teesta Stage IV, but no construction activity took place.

Initially, the project was for 495 MW capacity, but it was subsequently revised and enhanced to 520 MW due amendments intimated to the CEA. It is a run-of-the-river hydropower scheme, envisioned as a part of a cascade development of hydropower projects on Teesta River.

The project was ultimately accorded the Environmental Clearance (EC) by the MoEFCC on January 9, 2014. However, it has not been able to start construction yet due to non-availability of the Forest Clearance (FC)-II.

The MoEFCC subsequently issued a letter to NHPC on August 8, 2017, seeking additional details for the FC-II, which is still due. The letter added that the MoA signed between the NHPC and the Sikkim government would be amended.

A total of 324.07 hectares (ha) of land is required for the project, out of which 180.58 ha is private land, while 143.49 ha is forest land, total submergence of land is 105.37 ha.

In all 256 families will be affected by the project. As per the MoA, the project is to be built on a build-own-operate-maintain (BOOM) basis, which means the land and project is vested with NHPC during the entire life of the project. The gram panchayat units (GPUs) and the project affected people have, however, refused to accept any compensation, resettlement plans and are demanding scrapping of the said project.

Teesta Stage-VI hydel project is a Run of River (RoR) Scheme in Sirwani Village. The Project was earlier proposed to be developed by an SPV Lanco Teesta Hydro Power Ltd (LTHPL), promoted by the Lanco Group.

Accordingly, the Corporate Insolvency Resolution Process (CIRP) was initiated by order dated March 16,2018 of NCLT, Hyderabad Bench. In the Bidding Process under NCLT, NHPC emerged as highest bidder.

An investment proposal for an estimated cost of. Rs 5748.04 Cr (Jul’18 PL), which includes Bid amount of Rs 907 Cr for acquisition of LTHPL; estimated cost of balance work of Rs. 3863.95 Cr and IDC & FC of Rs. 977.09 Cr with completion period of 60 months was approved by the CCEA on 08.03.2019 for investment, acquisition of M/s LTHPL and execution of balance works of Teesta-VI HE Project by NHPC. LTHPL has been taken over by NHPC on 09.10.2019.

The outstanding long-term debt of the Company i.e., Rs. 9595.68 Cr. was structured taken out/ refinanced by REC Limited (REC) & Power Finance Corporation Limited (PFC) in December, 2019, by enhancing the principal debt repayment period of 27.25 years (105 quarterly instalments) with moratorium period of 12 months i.e. 30.09.2019 (against earlier repayment period ~11.5-12 years from COD) at existing interest rate of 11.40% p.a. quarterly rest basis.

The present outstanding long- term loan (as at 31.08.2021) is Rs. 10,111.20 Cr. The loan amount is inclusive ofRs.562 .96 Cr.(Previous year  Rs 139 .35 Cr.), moratorium availed under RBI COVID-19 regulatory package towards interest dues for quarter ended March 2020 and June 2020.

After which the repayment schedule extended by two quarters i.e. from September 2046 to March 2047, consequently number of quarterly instalments have increased from 105 to 107.

“There were blunders, not mistakes committed in the past as far as TUL is concerned, I had raised my concerns in the Assembly on the decision of the Sikkim Kantikari Morcha (SKM) government to appoint Adventa financial services and its affiliate MPA financial services , both based at Mumbai to facilitate the restructuring /refinancing of the debt ridden and loss making TUL”, said Dilli Ram Thapa, opposition Bhartiya Janta Party(BJP) MLA in the Sikkim assembly.

“Though the Chief Minister and power minister assured to do due diligence this time on issues of TUL, one remains sceptical”, added Thapa.


Soumik Dutta is a former correspondent Sikkim for UNI Delhi, a freelance investigative journalist and researcher with Washington DC. 100Reporters exists to hold accountable those wielding power and controlling money – specifically, governments, public officials and corporations in the U.S. and abroad – through fearless reporting that spans the globe. Soumik Dutta is a freelance journalist writing on politics, business, crime and sports has appeared in Asian Age, the Financial Express and The Assam Tribune newspapers, as well as The Himal Southasian (Kathmandu) and Media Voice (Chennai) magazines. His extensive coverage of the social and environmental effects of hydropower development on tribal communities won wide acclaim in his region. He is an honors graduate of the Scottish Church College of Calcutta University.He can be contacted on

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