From the outset, the Bharatiya Janata Party (BJP) in Tamil Nadu has consistently worked towards canceling the contract granted to BGR Energy. In the previous month of February, the Tamil Nadu Electricity Board (TNEB) terminated a minor contract awarded to BGR Energy for establishing a substation, citing significant delays in project execution.
This move by the TNEB follows a checkered history with BGR Energy, as the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) had previously scrapped a contract with the company in April 2021, citing its consistent failure to meet performance expectations. Financial indicators also paint a grim picture for BGR Energy, revealing a bank balance of a mere ₹33 crore last year and a staggering net loss of ₹355 crores.
The BJP Tamil Nadu has been criticizing the ruling DMK government’s attempt to revive the contract. The TANGEDCO apart from silently cancelling the contract has now recovered₹128 Crore Bank Guarantee submitted by BGR following the continuous whistleblowing by K. Annamalai.
The Tamil Nadu BJP president, through the official X handle, has provided a detailed account of the matter, raising questions and seeking an explanation for this decision from the taxpayers of the state. “Since October 2021, @BJP4TamilNadu has repeatedly voiced against the DMK govt’s decision not to award the ₹4472 Crore contract back to BGR Energy. The Gopalapuram family & the former Minister without portfolio, who is currently imprisoned for corruption, never heeded our request not to waste taxpayers’ money. After all their efforts to revive fell flat, TANGEDCO discreetly cancelled this contract early this year and has recovered the ₹128 Crore Bank Guarantee submitted by BGR. Now that this contract is cancelled again, will TN CM Thiru @mkstalin explain to the people of TN at least why he was desperate to revive this company?”
Since October 2021, @BJP4TamilNadu has repeatedly voiced against the DMK govt's decision not to award the ₹4472 Crore contract back to BGR Energy. The Gopalapuram family & the former Minister without portfolio, who is currently imprisoned for corruption, never heeded our request… pic.twitter.com/7a509uQSWE
— K.Annamalai (மோடியின் குடும்பம்) (@annamalai_k) March 9, 2024
A timeline of events related to the Lanco Infratech project, highlighting the bankruptcy of Lanco Infratech, the renewal of environmental clearance, and the project’s subsequent award to BGR Energy Systems was released by Annamalai. It outlines the cancellation of the Letter of Intent (LOI) in April 2021, BGR Energy’s legal petition, and the order by the Chief Minister, MK Stalin, to reinstate the contract. The BJP exposed alleged connections between the Gopalapuram family, BGR Energy, and the former minister. Despite a settlement between TANGEDCO and BGR, the project reportedly showed no progress, leading to the silent cancellation of the contract in January 2024. TANGEDCO had to encash the ₹128 Crore Bank Guarantee due to the delay in project commencement.
Context Timeline:
The timeline presented outlines the events related to the 1 x 660 MW Supercritical Thermal Power Station Project in Ennore, Tamil Nadu:
1. In 2014, Lanco Infratech was awarded the project.
2. By 2017, Lanco Infratech declared bankruptcy and filed for liquidation before the National Company Law Tribunal (NCLT).
3. On 11.12.2019, environmental clearance was renewed, and the project was awarded to BGR Energy Systems on 12.12.2019, valued at 74472 Crores.
4. On 23.04.2021, TANGEDCO informed BGR Systems about the cancellation of the Letter of Intent (LOI) regarding the contract award.
5. On 28.04.2021, BGR Energy filed a Writ Petition at the Madras High Court, with Senior Advocate P Wilson (DMK Rajya Sabha MP) appearing as senior counsel for BGR Energy.
6. In August 2021, a High-level committee chaired by the Chief Minister of Tamil Nadu, MK Stalin, ordered the reinstatement of the contract to BGR Energy.
7. In October 2021, BJP Tamil Nadu exposed alleged connections between the Gopalapuram Family, BGR Energy, and former Minister Senthil Balaji.
8. In February 2022, TANGEDCO and BGR reached a settlement, leading to the withdrawal of the writ petition against TANGEDCO by BGR Energy.
9. On 09.03.2022, TANGEDCO reinstated the Letter of Award (LOA) to BGR with a new commencement date for the contract.
10. On 19.08.2023, BJP Tamil Nadu published a letter from TANGEDCO to BGR Energy, indicating no progress in the project after 15 months of reinstating the contract.
11. In January 2024, the contract issued to BGR was silently canceled as the debt-ridden BGR Energy, attempting revival, reportedly “failed” due to Senthil Balaji’s imprisonment since June 2023.
12. On 5th February 2024, TANGEDCO had to encash the Rs. 128 Crore Bank Guarantee issued by BGR Energy due to the delay in the commencement of work.
The Tamil Nadu Electricity Board (TNEB) terminated a contract awarded to BGR Energy for a substation project due to significant delays in execution. This decision follows a previous contract cancellation by the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) in April 2021, citing consistent performance failures by BGR Energy. Financially, BGR Energy faces challenges with a low bank balance of ₹33 crore and a substantial net loss of ₹355 crores.
Despite these setbacks, BGR Energy recently secured a major project, the 660 MW Ennore Thermal Power Station expansion, valued at ₹4,442 crores. The allocation of this significant project after the contract termination raises concerns.
Tamil Nadu BJP Chief K Annamalai expressed concerns on social media, highlighting potential financial losses for the government and suggesting action against individuals supporting such contractors. He commended Chief Minister MK Stalin for reinstating the ETPS project in favor of BGR Energy. Annamalai questioned the ability of a financially constrained company to manage a large-scale power plant, emphasizing the seriousness of the inquiry.
In 2022, Annamalai had previously accused TANGEDCO of offering the ₹4,442 crore deal to BGR Energy amid financial troubles, alleging favoritism by the DMK government. Electricity Minister V. Senthil Balaji denied wrongdoing, citing due diligence.
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