The government has decided that hydroelectric projects, especially in Jammu & Kashmir, Sikkim and Arunachal Pradesh, will not be approved unless cleared by the Union home ministry.
Stating that foreign participation in such projects might step into areas of national security, the Centre has decided to go by the recommendations of an inter-ministerial task force, set up to look into the issue. The task force has advised that security vetting of foreign bidders be done by the ministry of home affairs (MHA).
However, sources said that the measure will be an interim one, till the time the government comes out with a clear national policy. Since in case of hydropower projects any specific policy does not exist at the national level, the task force unanimously agreed that it was desirable to undertake security vetting of foreign bidders by the home ministry for the projects in the border areas, top government sources said.
To avoid controversies at a later stage, the task force has recommended that in respect of projects/contracts both at request for project qualification (RPQ) and request for financial qualification (RFQ) stage, names and details of bidders should be forwarded by developers (Central and state PSUs or private companies) to the MHA for security clearance and the ministry will be bound to return the proposal with its approval or rejection within 21 days of its receipt.
For the ministry, it will be mandatory to give specific reasons in rejecting a proposal, as many hydroelectric projects are funded through the World Bank or the ADB. The sources pointed out that in the event of any objection to a lowest foreign bidder, the situation becomes awkward as funding agencies insist on knowing the reasons for disapproval.
The task force has also brought in a rider at the request for final project stage, where the successful bidders will need to ensure that the number of foreign national working for the project at given point of time will not exceed 40 people and for unskilled workforce they will employ only Indians.