In what appears to be a murky deal, the H D Kumaraswamy government has cleared power transmission contracts worth a whopping Rs 2,871 crore awarded to a company blacklisted by Madhya Pradesh, disregarding objections raised by top Energy Department officials.

Karnataka Power Transmission Corporation Ltd (KPTCL) has awarded over a dozen contracts to KEC International Ltd, a flagship company of the Mumbai-based RP Goenka Group, despite Madhya Pradesh’s Madhya Kshetra Vidyut Vitaran Company Ltd (MPMKVVCL) blacklisting it for financial impropriety. These contracts were awarded between 2014 and 2018.

Curiously, this happened right under Kumaraswamy’s nose: he holds the Energy portfolio and also chairs KPTCL.

MPMKVVCL blacklisted KEC from November 2013 to November 2016. The company still figures in the blacklist of the Centre’s Deendayal Upadhyaya Gram Jyoti Yojana.

Documents with DH reveal that the then KPTCL director (Finance) raised objections saying the company deliberately concealed its blacklisting while participating in the bidding. The officer, who has been replaced since, argued that KEC was ineligible to get contracts till November 2021 and was liable to face action.

The issue was brought before the KPTCL board of directors on March 6, 2019. “KEC has given self-declarations for works allotted to them which state that they have not been disqualified for non-performance in any of the government utilities in the past five years. The fact that KEC has been blacklisted has not been disclosed to KPTCL,” the agenda of the meeting stated.

KEC was debarred in July 2015. This was stayed by the Madhya Pradesh High Court in August 2015. The court vacated this interim stay in April 2017. In January 2018, the case was dismissed based on KEC’s plea that it was “infructuous”.

KPTCL’s legal consultant concluded that by virtue of the stay, which was in force till April 2017, the debarment was “never given effect”.

Based on this, KPTCL gave KEC a clean chit and decided “not to consider the allegation of non-declaration of debarment”. “The decision is based on legal opinion,” KPTCL MD S Selvakumar said. An email seeking a reaction from KEC elicited no response.