Uttar Pradesh?s tryst with power reforms seems to have boomeranged. Close on the heels of Coalgate, which has had the Central government scurrying for cover, a report by the state accountant general (AG) has alleged irregularities in the appointment of Torrent Power (TPL) as the power distribution franchisee (DF) for Agra.
The report also states that the appointment was done with complete disregard to the tendering procedure and has already caused a loss of R489.89 crore to the state exchequer in the first two years since the city was handed over to the company in 2010. It further notes that a future loss of R4,858.50 crore is expected in the remaining 18 years that Torrent will be in charge of the power distribution in Agra, thereby taking the accumulated losses to R5,348.35 crore. The report could have a damning effect on the Akhilesh Yadav government, which had only recently directed officials in the power sector to extend all possible help to Torrent in Agra, while indicating that power distribution in Kanpur, too, would be handed over to the company soon.
The decision to hand over power distribution to Torrent was taken by the previous Mayawati government in 2009.
According to the report, UPPCL awarded the contract to Torrent at a rate which was 27% less than what the energy task force had recommended. The task force, headed by the then chief secretary, had recommended that the company be handed over the contract on an agreement of revenue realisation at the rate of R2.10 per unit in the first year. However, the UPPCL gave the contract at the rate of R1.54 per unit. Likewise, the agreement prescribed a recovery rate of R2.45 per unit for the 20-year period. ?The UPPCL had intimated to the bidders that the expected energy input rate (EEIR) of R2.10 per unit for the first year and R2.45 per unit as the levelised rate for the remaining 19 years. The consultant, in its report, however, considered EEIR as R1.74 per unit based on the 2008-09 data,? the report states.
It added that while justification for this was not made available in the audit, ?the consultant went on to further deduct R0.47 per unit to justify the final rate of R1.54 per unit as Different Expenditure likely to be incurred based on a discussion with DVVNL officials. No minutes were shown to the audit of the same while the deduction would have been allowed only on the basis of authenticated information. The logic and justification for discussion with DVVNL (Dakshinanchal Vidyut Vitaran Nigam) by the consultants is not justified at all”.
Stating that the scam started unfolding right from the day when the tender was opened on February 24, 2009, the report observes that there was a collusion among the consultant of the project, the Uttar Pradesh Power Corporation and the DVVNL in the appointment of the DF. The report states that the bids were opened on February 24, 2009 at 2 pm and on the same day, both the technical as well as the financial evaluation were done and the submission of a revised bid was done after negotiations with the bidder.
?The entire procedure was carried out in one report of the consultant and that too in one day, which proves that all activity was carried out by the consultant. There was utter disregard in following the tender procedure. It is clear that the consultant and the management colluded in award of contract and a mere formality was completed. The ETF on the next day, viz February 25, 2009, recommended to the government for awarding the contract to TPL. The same was done and TPL was appointed as DF on February 26, 2009. Thus the entire purchase procedure was flouted to extend financial benefit to TPL,? the report says. Torrent has also bagged the power distribution contract for Kanpur under the input-based franchisee model. However, in view of the stiff opposition from the power employees, the government had decided to put Agra to test and move to Kanpur later.
Torrent, which has the successful Bhiwandi model to showcase, also handles power distribution in Ahmedabad and Surat. But unlike other cities, the biggest challenge for the company in Agra was to upgrade the power distribution network to a level wherein it could cut down on the whopping 42% transmission and distribution losses as against the national average of 30%.