The 1082-MW project considered to be one of the prestigious eight fast track power projects in the country, jointly promoted by the Ispat (53 per cent), Alstom of United Kingdom (32 per cent) and Electricity de France (15 per cent) to set up the thermal power plant at Bhadrawati in Chandrapur district of the State.

Talking to the media here, he said that leaving apart reduction, the Mittals had managed to get a rise of 23 paise per unit on what they had sought earlier, thus getting a further bonanza of Rs 182 two crore per year for 20 years.

Purohit startled media persons by circulating a copy of a 1997 confidential note prepared for the MaharashtraCabinet, to substantiate his claim. He alleged that both the BJP-led Central Government and the Shiv Sena-BJP State Government were involved in ``this huge fraud on the public exchequer''. Purohit also revealed that a top level Bharatiya Janata Party minister with the Joshi government gave him the cabinet note on the issue to expose the nexus.

He said he would challenge the PPA in the high court in a separate writ petition. His earlier petition challenging the allotment of coal blocks near the ordinance factory and not inviting global tenders for the project has already been admitted by the high court which stayed the operation of the mining lease in favour of Mittals.

Purohit, who opposed the multi-crore power project to be set up at Bhadrawati, challenged the mining of coals for the proposed power plant near a defence project, without floating a global tender, got a stay order from the Nagpur bench of Mumbai HC, a few months back. Purohit was also denied a ticket in the last Lok Sabha election due tothe tussle on the issue with party stalwart, Pramod Mahajan, who was allegedly supporting Mittals for clearance of the project. Purohit quoted reports published in leading financial newspapers stating that the office of Prime Minister AB Vajpayee prodded the power ministry for early grant of counter-guarantees for the Mittal project.

The state electricity board signed the PPA within two days of the Centre's sanction of counter-guarantees on August 1. Chief Minister Manohar Joshi, Deputy CM and Energy Minister Gopinath Munde were present at the signing ceremony along with Ispat's vice-chairman and managing director PK Mittal.

In a signed statement, Mr. Purohit said the claim of the two sides that the cost of the project and purchase prices of power had been brought down during the negotiations was a blatant lie. ``A fraud is being perpetrated on the people of Maharashtra to which now, along with the state government and Mittals, the central government is a party'', he said.

Quoting from the confidentialCabinet note he said the real levelised power tariff from the project should not be more than Rs 1.62 per unit at 15 per cent internal rate of return for the project as per the central government norms.

He said the Cabinet note was clear that if the Mittals were to be granted an internal rate of return of 16.95 per cent the power tariff should have been no more than Rs 1.69 per unit. At 15 per cent internal rate of return it ought to have been Rs 1.62 per unit which the United Front government was insistent upon.

The state then suggested another formula granting an internal rate of return of 1.34 per cent which would have meant a tariff of Rs 1.65 per unit. Thus, at no stage a higher tariff was considered.

To say that the rate of Rs 1.85 per unit was a reduced one was nothing but a deliberate spoof of facts planned to accrue illegal benefits at the cost of tax-payers' money, Purohit said.