BHEL CMD’s tenure being reviewed by Indian govt

In an interesting and indicative move the Indian government on 3rd February 2015 floated a vacancy for the Bharat Heavy Electrical Limited (BHEL) Chairman and Managing Director’s (CMD) post.

This is in spite of the fact that the current BHEL CMD’s tenure officially ends only on 31st December 2015 which is more than 10 months away. The incumbent CMD is B.P Rao.

The BHEL CMD whose term was supposed to end in 31st December 2013 got a rare and controversial distinction of being the first ever Public Sector MD to get his term extended for two years till 31st December 2015 by the previous UPA government.

This also comes in the wake of the BHEL-BVT Commission issue in Bhutan where 1.5% or Nu 240 mn was paid as commission by BHEL to BVT a local Bhutanese firm for supply of electro-mechanical equipment in Punatsangchu II and Mangdechu projects. The Commission was agreed to in 2010 which is respectively two and three years before Punatsangchu II and Mangdechu projects gave monopoly supply orders to BHEL.

The Commission came in for scrutiny as tender laws in India and Bhutan do not allow for such commissions to secure tenders. Also the tender was a government nominated one and there were no rival bidders. The Commission also only pushed up the cost of the projects to the benefit of a few private individuals. Also, recently Alstom, a French company was fined 772 mn US dollars by the American government for engaging in similar practices to get orders for supplying hydro power equipment among others. The approval for the Commissions would not have been possible without the cooperation and consent of the CMD.

The Bhutan government recently had handed over the issue for investigation to the Anti Corruption Commission.

On the condition of anonymity a senior Indian official in the Ministry of Heavy Industries and Public Enterprises said that the Modi government has asked for a review of the BHEL CMD’s tenure especially in the wake of ‘controversies’ around the CMD.

This review of the tenure of B.P Rao was also confirmed by a news website in India www.indianmandarins. com that specializes in tracking the movement of senior government officials in India.

Energy Journal Enertia which is also following the issue also confirmed the moves being made.

Editor of the Journal Enertia Professor A.G Iyer said that as per ENERTIA’s own reliable sources in Delhi, Prime Minister Narendra Modi’s office via his Secretariat, P.K.Mishra have directed Cabinet Secretary Ajit Seth and Ministry of Heavy Industry & Public Enterprise Secretary, Rajan Katoch to curtail B.P. Rao’s tenure as CMD BHEL.

The Journal’s Editor said that according to its sources there were two main reasons for the review. One was the BHEL-BVT Commission issue in Bhutan and the other was the controversial extension given to B.P Rao by the previous UPA government.



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