Shimla, March 6 (IANS): A multi-million-rupee hydropower project sale deal between Jaiprakash Power Ventures Ltd and a consortium led by an Abu Dhabi-based company in Himachal Pradesh may head for a showdown as Chief Minister Virbhadra Singh Thursday said the Indian firm cannot sell the projects without the state's permission.

"Jaypee company cannot sell its projects without involving the government as it has signed the implementation agreement with the state," he told reporters here.

Virbhadra Singh said the projects were allocated to the company after it signed a memorandum of understanding (MoU) with the state.

"The state will not allow any company to sell its stakes without the consent of the government," he said in an informal interaction.

The hydropower projects of Jaiprakash Power Ventures, a subsidiary of infrastructure conglomerate Jaypee Group, are located in Kinnaur district, close to the China border, on the Satluj river.

A consortium led by TAQA, an Abu Dhabi-based energy and water company, last week signed an agreement to purchase the 300 MW Baspa Stage II and the 1,000 MW Karcham Wangtoo plants, the country's largest hydro project in the private sector.

TAQA, which holds a 51 percent stake in the consortium, will have control of operations and management of both facilities.

The chief minister said the government came to know about the deal from media reports.

"We should know the credentials of the company as it is investing in a sensitive area. The state would look into the deal," he said.

The first unit of 250 MW of the Karcham Wangtoo project, located some 200 km from state capital Shimla, was operational May 26, 2011. Subsequently, the other three units were also made operational.

Official sources said the agreement between the state and Jaiprakash Power Ventures Ltd for the Karcham Wangtoo project was signed in 1993. The implementation agreement was signed in 1999.

The work on the Rs.6,903.37 crore hydro project began in April 2006 and was completed three months ahead of schedule in 2011.

The company's Baspa project is located upstream of the Karcham project. It was commissioned June 8, 2003 at a cost of Rs.1,624.72 crore.