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Maya’s power deal to set back state by Rs 10,831 cr in 25 years

The Uttar Pradesh government is set to incur a loss of Rs 10,831.82 crore in coming 25 years due to a power purchase agreement signed by the Mayawati government in 2011-12.

Written by Express News Service | Lucknow |
September 17, 2013 4:53:02 am

The Uttar Pradesh government is set to incur a loss of Rs 10,831.82 crore in coming 25 years due to a power purchase agreement signed by the Mayawati government in 2011-12. Also,the state will incur a loss of Rs 4,601.12 crore in coming 18 years due to the handing over of Agra’s power distribution to Torrent Power Limited (TPL).

The fact came to light on Monday in the report of the Comptroller and Auditor General (CAG) for the year ending March 31,2012,tabled in the Assembly by Parliamentary Affairs Minister Azam Khan.

According to the report,Uttar Pradesh Corporation Limited (UPPCL),on part of its discoms,invited tenders in June 2007 for power supply for the next 25 years. Four tenders were received and the financial bid was opened in April 2008. The best reduced price was invited in May 2008.

However,the government reinvited fresh tenders after the rates of Reliance Power Limited (RPL),which was the lowest bidder,were not found appropriate. Fresh tenders were invited in August 2008 and three tenders received. Best reduced price was again sought in February 2009. Jaiprakash Associates Limited (JAL) quoted Rs 3.020 per unit and was issued the letter of intent.

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The CAG report stated that as per the tenders received in 2007,Lanco had quoted Rs 2.888 per kwh and the best reduced price of Rs 2.651 kwh. But it was found to be on higher side of the expected tariff of Rs 2.60-2.70 per kwh by the consultant. RPL’s quotation of Rs 2.64 kwh was turned down,as it was presumed that it will lead to a loss to the company,leading to closure of its power plant.

CAG report added that Lanco’s quotation was responsive and fulfilled all the criterion. It was also within the range of consultant’s

tariff slab but was ignored. Thus,handing over the power supply contract to JAL at

an higher price will lead to a loss of over Rs 10,000 crore to the state government in coming 25 years.

Another anomaly has been detected in Dakshinachal Vidyut Vitran Nigam Limited (DVVNL),where it overlooked the recommendations of Energy Task Force (ETF) for selection of Distribution Franchisee (DF) under the scheme of appointing input based franchise system. In this,Torrent Power Limited (TPL) was selected as DF for 20 years for Agra in February 2009. But due to the delay,the distribution of Agra was handed to TPL in April 2010.

TPL quoted Rs 1.54 per unit as net revenue receipt. Based on the Expected Input Energy Rate (EIER),the consultant had suggested Rs 1.27 per unit. The suggestion was overlooked and TPL was appointed as DF. CAG report mentioned that till March 2012,a loss of Rs 421.12 crore has occurred while in the coming 18 years,the loss will accumulate to Rs 4,601.12 crore.

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