The SNC-Lavalin deal is one of the two KSEB-related scams that have played around with the dynamics of Kerala politics for years. The other being the Idamalayar case, which saw a former minister - R Balakrishna Pillai - sentenced to imprisonment.
If the latter case pertained to the awarding of construction contracts, the SNC-Lavalin deal was concerned with the modernisation and renovation of three hydel projects - Pallivasal, Sengulam and Panniar.
The case was that the deal with the Canadian firm incurred a loss of Rs 374.50 crore to the state exchequer. The story of the scam goes back to 1992 when the Central Electricity Authority (CEA) recommended the upgradation of the generators at the three projects. But the KSEB ignored it and instead decided to renovate the projects. In August 1995, when G Karthikeyan of the Congress was Power Minister, an MoU for a consultancy contract was signed with SNC-Lavalin. But it was after Pinarayi Vijayan became the the Power Minister that the deal was upgraded and Lavalin made a supplier through a Fixed Price Contract.
Pinarayi also visited Canada to clinch the deal, but no experts accompanied him. Additionally, it was alleged that that he had kept the Cabinet in the dark about the deal. Also, as a part of the deal, Lavalin was to mobilise funds for the Malabar Cancer Centre, but a large chunk of the money - Rs 86.25 crore - never reached the government. In February 2006, the Comptroller and Auditor General (CAG) found irregularities in the deal and in January, 2007, the High Court asked the CBI to investigate.
The CBI listed the following as accused: former Principal Secretary (Power) K Mohanachandran, KSEB former member (Accounts) K G Rajasekharan Nair, KSEB former chairman R Sivadasan; former chief engineer (generation) M Kasthuri Ranga Iyer, KSEB former chairman Siddhartha Menon, SNC-Lavalin former senior vice-president Klaus Trendl, former Power Minister Pinarayi Vijayan, former Joint Secretary (Power) A Francis and the SNC-Lavalin Company.