Tangedco to incur loss of Rs 52,000 crore?

Chennai: Former TNERC member S. Nagalsamy on Friday alleged that irregularities in procurement of solar power and long term power purchase would cause a total loss of Rs 52,000 crore to the Tangedco over a period of 15 to 25 years.

Addressing a press conference here, Mr Nagalsamy said that by signing power purchase agreement with 11 private power producers to procure 3330 mw in violation of government of India guidelines, Tangedco would incur a loss of Rs 45,000 crore.

Pointing out that the 11 companies have quoted a levelised tariff ranging from Rs 4.91 per unit to '9.85 a unit for 15 years period, he said Tangedco accepted the lowest quoted tariff of '4.91 per unit and started buying power. He noted that at the same time, Athena Energy Venture PVT Ltd agreed to supply power at '3.32 per unit to Uttar Pradesh while Andhra Pradesh signed agreement with PTC and Thermal power Tech Company for Rs 3.44 and Rs 3.675 per unit.

“The capacity and fuel charges quoted in the tender were unrealistic and very high. The lowest bidder DB Power Ltd quoted rates of capacity charge vary from Rs 2.1 to Rs 3,” he said, adding that similarly fuel charges also varied from Rs 1.06 to Rs 6.78 per unit which is highly unrealistic.

Citing the guidelines of standard bid document issued by GOI that stipulates conditions to prevent the generator from quoting a unreasonable rate for a long time, he said as per it, the ratio between the minimum and maximum fuel charges quoted by a producer should not be more that two times.

“If a producers quotes a minimum fuel charge of Rs 1 per unit, he cannot charge more than Rs 2  as the maximum price for 15 years. If this condition is not fulfilled in the tender, such a tender should be rejected as invalid,” he said.

“Out of 11 companies awarded contract, six tenders are against the stipulation of guidelines. They are to be rejected but the Evaluation committee approved these tenders. The L1 company DB Power  also did not qualify and it violated guidelines. Hence all tenders are invalid and are to be rejected,” he said, noting that a retired GM from Cooperative bank was appointed as external member of evaluation committee breaking from the tradition of co-opting an officer with expertise from similar organisation like NLC.

Pointing to the loopholes in tendering process, he said that Tangedco has started paying power bills upto the rate of Rs 7 .38 per unit in 2014-15 itself. Mr Nagalsamy also pointed out that Tangedco’s decision to procure solar power over and above the renewable purchase obligation fixed by the commission would result in a loss of Rs 7000 crore over a period of 25 years. The commission, in violation of the Appellate Tribunal of Electricity direction, has revised the RPO for 2015-16 one day before  the closure of the financial year on March 30 this year at 0.50 per cent from 0.05 per cent.

“Target cannot be fixed retrospectively. Even if we agree to this 0.5 per cent RPO, the requirement is only 200 mw. The PPA signed with Adani Group for 648 mw shall not be valid and it is against the orders of the commission,” he said.