Lucrative electricity projects given to PSUs without bidding process

Lucrative electricity projects given to PSUs without bidding process

J&K cabinet’s decision before durbar move to Jammu; India’s power minister saying 9.75% profit for PSUs too high

SRINAGAR: After cancelling the contracts of two companies which had won the tender for electrification of villages and putting up new power cables in six Kashmir districts, the J&K government has decided to give the contract to two Public Sector Undertakings (PSUs) without going through a bidding process. A snag, though, has hit this decision, too: the Indian power minister is not agreeing to the margin of profit allowed to the two PSUs.
Top government sources told Kashmir Reader that the J&K cabinet decided to give the power infrastructure project to two PSUs – REC-PDCL and PGCIL (Power Grid Corporation of India Limited) – in its last meeting held in Srinagar, before the government moved to Jammu. Ironically, the two PSUs have no prior experience in distribution of electricity, a mandatory pre-requisite for a company to take up the project. The REC-PDCL, according to information on its website, has only experience in transmission, while the PGCL has no experience at all in either distribution or transmission.
As per the laid rules, a power infrastructure project should not be given to any company without going through the tendering process.
Deputy Chief Minister Nirmal Singh and Commissioner Secretary for Power, Dheeraj Gupta, had cancelled the tenders that were acquired by two Hyderabad-based companies after bidding in September this year. The reason proffered for cancelling the tenders was that the companies did not meet the minimum techno-commercial qualification, even though the government’s own top engineers had in a report submitted to the government stated that the companies did meet the qualification.
The project to augment and create new electricity infrastructure was under two government of India schemes – the Prime Minister’s Development Plan (PMDP-Rural) and the Deen Dayal Upadhyaya Grameen Jyoti Yojana (DDUGJY) – meant for all the ten districts of Kashmir Valley. Sources told Kashmir Reader that the two PSUs which have now been given the project have been allowed 9.75 percent profit, a percentage to which India’s power minister RK Singh is not agreeing to.
In an email communication, a copy of which was accessed by Kashmir Reader, Minister of State (MoS) for Power, Syed Farooq Andrabi, told Dheeraj Gupta on Nov 9 that he had a meeting with Power Minister RK Singh about the sanctioning of the project to the two PSUs.
“Yesterday I met Power Minister RK Singh ji in there (sic) office chamber. We had discussion regarding the T&D Sector and Hydro… Union Power Minister told me that our cabinet have raised certain queries regarding the higher Charging of Fees of PMA and PIA by REC-PDCL and PDCIL. The Union Minister were (sic) of the view that both the PIA and PMC/PMA clubbed should not be more than 6 or 7 % inclusive of all taxes,” reads Andrabi’s email.
“Also, they told me that on 6th Nov both PSUs have been called for the price Negotiation by JKPDD. Union Minister have (sic) desired that state must immediately submit time lines/Miles stone for project implementation to his ministry,” the email reads.
Deputy Chief Minister Nirmal Singh could not be reached for his comments. His PRO told Kashmir Reader that he was busy in a meeting. MoS Power Andrabi did not respond to repeated phone calls and text messages from this newspaper.


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