Money problem!

The state of the State’s Finances and the fate of major projects have has been imperiled by the Finance Commission

a NOW FEATURE

Chief Minister Pawan Chamling has already officially called on the Union Finance Minister Arun Jaitley thrice in the past year to explain the financial setback caused to Sikkim due to the budgetary allocations worked out by the Union Government which have saddled Sikkim with substantial shortfalls. For a resource-strapped State like Sikkim, even minor adjustments in funds allocations can severely disrupt implementation, and it must have been such considerations which convinced the CM to also take up the matter with the Prime Minister when he called on him earlier this year in April. Sikkim, of course, is not alone in having been left shell-shocked by the recommendations of the 14th Finance Commission and how the Union Government is now allocating funds and financial assistance. Several social sector interventions now face uncertain futures and smaller states, with their narrow resource capabilities, are yet to figure out how they are to sustain anything anymore now that the purse strings have suddenly tightened.

Unpaid Lanco staffers urge state administration to intervene

GANGTOK, 18 Jan: Lanco, developer of Teesta Stage VI hydel project, is reportedly swamped in a financial crisis and it is not just unpaid salaries of its workers over a number of months. The unavailability of funds and the overshooting of budget estimates are suspected to have brought Teesta Stage VI to a standstill.
Workers at the Lanco project have gone on a dharna demanding their salaries and wages for the past few days and company officials are unavailable for comment. A written application was handed over to the East district administration by the agitating workers on 17 January seeking the intervention of the administration in resolving the impasse. When contacted, the ADC [East] informed that the application has been forwarded to the Home Department and further instructions are awaited.
Meanwhile, when contacted, the Lanco head office in New Delhi seemed unaware of the problem going on here in Sikkim and even the Power & Energy Department here has not been officially intimated by Lanco regarding the raging controversy.
Actually it is not just Lanco but several other under-construction hydel projects in the state which are facing a financial crisis with the lending agencies, mainly the banks withdrawing financial support and keeping further sanctions on hold. Lending agencies such as the IFCAI, Rural Electrification Cooperation and banks such as the Punjab & Sind Bank which have been supporting projects here in Sikkim are informed to have switched off the funds tap primarily because of a petition filed in the High Court of Sikkim alleging various acts of omission and commission on the part of the companies as well as the government agencies.
As for Lanco which is developing the Teesta Stage VI project, it is informed that the company may even shut shop as it has suffered heavy losses not just because of the “overshooting of budget estimates” but also due to what some say, the heavy landslides and other natural calamities affecting the project site.
Power Department officials said that they came to know of the problem through the newspapers but had not been intimated about anything by the Lanco authorities.
The Secretary stated that the matter would be taken up at the State Electricity Regulatory Corporation meeting; besides, the present Secretary, who took office only on 07 January, is yet to be inducted into the Board of Directors of Lanco in order to have first-hand knowledge of the problems facing the project or take any action.