The CBI on Thursday told its special court considering a discharge plea of former Power Minister Pinarayi Vijayan in the SNC-Lavalin case that the proposal to set up a cancer hospital at Thalassery in Kannur district in return for awarding the Canadian firm a fixed price rate contract to modernise three hydroelectric projects in the State at an ‘exorbitant’ cost of Rs.374 crore was the ‘brainchild of Mr. Vijayan, the seventh accused in the case.

Its prosecutor, Y. Bhasuran, submitted in the court an official note purportedly written by Mr. Vijayan, in which the former Minister had stated that he “had requested for assistance to set up a cancer hospital at Thalassery as part of the rehabilitation proposal for the Panniyar, Sengulam, and Pallivasal hydroelectric projects.”

Moreover, on December 12, 1997, Klaus Triendel, an accused in the case and vice president of SNC-Lavalin, wrote a letter to Mr. Vijayan stating that out of the total project cost, Rs.103 crore would be to build the proposed Malabar Cancer Centre (MCC) at Thalassery ‘concurrently’ with the execution of the contract to renovate the three hydroelectric projects. “The funds for MCC would be provided by various Canadian agencies,” the CBI said quoting the letter.

The then Chief Minister E. K. Nayanar and the then Finance Minister T. Sivadasa Menon saw the note and the letter, and on the basis of the documents, gave sanction to register a society, named Malabar Cancer Centre, with the Chief Minister as its chairman.

The then Finance Minister wrote that “it maybe examined that all procedures of the Government of India are followed since it’s an inter-governmental assistance.” However, the CBI said, the Union government’s approval for the deal was never obtained.

Mr. Klaus Triendel signed a Memorandum of Understanding (MoU) for establishment of the MCC and sent it to the government, which was only a subsequent signatory to the agreement originally authored by the Canadian firm.

In 2005, the then Power Minister Aryadan Mohammed wrote to the Canada government seeking to secure the Lavalin’s promised grant element for the proposed MCC. Canada clarified that it was never a signatory to the agreement and that it had not authorised Lavalin to enter into any contract or MoU with the Government of Kerala on its behalf, the CBI said.

Mr. Vijayan’s counsel opposed the CBI’s contention and said the proposal to set up the MCC was part of the offer extended by Lavalin and hence it was essentially a goodwill gesture on the part of the Canadian firm.

He also opposed the CBI prosecutor’s statement that former KSEB chairman R. Rajagopal was “abruptly shifted out of his post” due to his opposition to the deal with Lavalin. “Rajagopal was chairman for three years. He being posted out was only a natural administrative procedure,” the counsel said.

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