"We are satisfied with the deal," the state energy minister, AU Singhdeo, told The Financial Express. He said that AES Corporation had been selected as a partner in the government-owned thermal power generating company following international competitive biddings and the Cabinet had approved the deal. "Moreover, the government has got 150 per cent premium on the 49 per cent equity," Singhdeo said.

In 1998, when the then Congress government, headed by JB Patnaik, decided to offload 49 per cent stake in OPGC in favour of AES for Rs 603 crore, the Naveen Patnaik-led Biju Janata Dal, which was the main opposition in the state assembly at that time, had strongly criticised the government for the deal alleging huge kickbacks.

Singhdeo also told the state assembly on Wednesday that the disinvestment of OPGC shares was decided by the state cabinet after international competitive biddings in which the AES Corporation was selected.

Replying to the debate on the energy department's budget demand, the minister, however, assured the House that the government was open to any inquiry into the deal. Referring to the allegations made by members, he said, "we are ready for an inquiry if there are any specific charges of irregularities in the deal."

Expressing concern over the slow pace of restoration of power connections in the cyclone-hit villages, he said that the government had filed a complaint with the Orissa Electricity Regulatory Commission (OERC) against Cesco for failing to meet the deadlines. He said that about 413 villages were yet to get power supply as on July 17, 2000.

He said that Orissa was a power-surplus state with generation of 432mw during peak hour, and added that the state was currently exporting power to the neighbouring states of Andhra Pradesh and Madhya Pradesh.

Singhdeo said that the state's power sector reforms had started paying dividends. According to him, the plant load factors (PLFs) of Talcher Thermal Power Station (sold to NTPC) and OPGC have improved substantially.

The disinvestments have unlocked government funds and the state is no longer paying subsidy to the power sector. He said that the Orissa Hydro Power Corporation (OHPC) and OPGC had started making profits.

He, however, admitted that the reforms were still in the initial stages and it was too early to judge. The transmission and distribution loss has come down to 43 per cent from 51 per cent but it needed to be reduced further. Moreover, the stability and quality of power supply would have to be improved much more, he said.