Approval of 225 MW plant as per the norms: U''khand Govt

On the issue of 12.5 percent free electricity of total power generation as royalty from the project to the state,which would allegedly cost the state exchequer more than Rs4000 cr, Panwar said the clause was applicable only forhydropower projects.

"In the case of thermal or gas-based power projects,there is no provision of royalty to the home state as per theunion power policy," he added.

However, Panwar said the state government in itsrecently approved gas-based energy policy has made itmandatory for project developers to give at least 10 percentof power at cheaper rates to the state and this will bebinding on Sravanthi Energy too.

On allegations that the state recommended exemption ofcustoms duty worth Rs 60 cr on machines for the project withan intention to benefit the company, Panwar said customs was acentral government department and exemption was also given byit.

Defending the government, Kumar said the sanction wasgiven as the project was in public interest; it would notonly bring investment of Rs 700 cr and create large employmentopportunities but also provide power at cheaper rates to thestate.

The Congress leaders have sought a CBI probe into theapproval of project to Sravanthi Energy, alleging wide-spreadirregularities and corruption by the BJP government.