Swan Energy in the dock at Gujarat High Court

Vol 14, PW 15 (27 Jan 11) Midstream & Downstream

Swan Energy’s attempts at back-door entry into the gas-based power generation business in Gujarat have hit a major stumbling block.

PETROWATCH learns Gujarat High Court chief justice SJ Mukhopadhyay has sharply criticised Gujarat state authorities for their controversial decision to offer Swan a 49% stake in the gas based 2100-MW capacity power station under construction at Pipavav. Court papers seen by this report reveal how during a hearing on December 30, angry Mukhopadhyay demanded more details from the Gujarat government over its deal with Mumbai based Swan by the next hearing, scheduled for (Wednesday) February 2.

“The Gujarat government must carry out a new and transparent tendering process if it wants to give a stake in the Pipavav power project to a private player,” said Mukhopadhyay, in response to a statement given under oath by the project promoter, GSPC Pipavav Power Company, where Swan holds 49%. “The affidavit raises more questions than answers,” he said.

In a directive that left no room for ambiguity, Mukhopadhyay ordered the Gujarat state government to give the court “a clear and transparent” picture of all developments that led to the selection of Swan. Mukhopadhyay’s anger was compounded by arguments from lawyers representing Swan and state authorities, including advocate general Kamal Trivedi and principal government pleader Prakash Jani.

Astonishingly, they said state government consent for the sale had been given only ‘in principle’ and that a final decision is awaited. “Many details in this case are just not clear,” added Mukhopadhyay, angrily.

“How did a private company like Swan enter into the picture I need a detailed explanation for this. How did Swan come to know about the Pipavav project and that a stake was for sale” Bluntly, Mukhopadhyay added: “The High Court wants to know why a tendering process was not followed and why Swan was selected”