SMC finally succeeds in contracting out waste-to-energy plant at Achan

SMC finally succeeds in contracting out waste-to-energy plant at Achan
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Consortium of three companies is to complete work within 18 months; if not, they will pay Rs 50k per day

Srinagar: The struggle of the Srinagar Municipal Corporation (SMC) to set up a waste-to-energy plant at the Achan dumping site on the outskirts of Srinagar is finally over. The corporation has successfully contracted out the project to a consortium of three companies to establish and make operational a waste-to-energy plant at Achan within 18 months.
Under public-private partnership (PPP) mode, the plant will be designed, developed and managed by the consortium of Highland Automobiles Private Limited, Key Stone Energy Limited, and Astrix – at a cost of around Rs 120 crore.
The contract stipulates that the Achan plant should generate 5-megawatt of electricity by consuming 500 metric tonnes of waste that Srinagar city produces in a single day. This electricity would be sold to J&K government at 7.5 paisa per unit, a rate that is 3 paisa higher than the current unit-purchasing amount.
“The identification of land has already been started by the bidder and creation of infrastructure would follow soon,” an official of SMC said.
The National Green Tribunal (NGT) had proposed a waste-to-energy plant at Achan to the SMC two years ago. The aim was to end the crisis of solid waste management in Srinagar and to create a mechanism for waste management at affordable cost. The tribunal had also taken strong exception to delay in setting up the plant.
The NGT has now directed the municipal corporation that the project should be completed within 18 months from the day of signing of agreement. And in case the companies fail to do so, they will have to pay Rs 50,000 for every single day that exceeds the deadline.
“Complete the plant within 18 months of signing the PPA (Power Purchase Agreement). The document is already with the state government. Let that be done expeditiously. In case of delay beyond the contract period of 18 months, Rs 50,000 per day shall be charged as environment compensation,” NGT chairperson Justice Swatanter Kumar said in one of his directions.
The SMC had been struggling to contract out the project, having issued tenders more than seven times and failing every time. Either the bidding firms left the contract formalities mid-way or there was some disagreement over the power-purchasing rate.
Last year, three companies had participated in the bidding process of whom two withdrew. One company, Spaak Bresson Private Limited, was tendered to design, finance, build and operate the project, but due to differences over the Power Purchase Agreement, the tender was cancelled.
SMC’s Solid Waste Management Officer, Nazir Ahmad Baba, told Kashmir Reader that the delay in contracting out the project occurred because the entire cost was to be borne by the bidder. Because of this, firms were hesitant to invest a huge amount.
“We hope the plant is set up much before the deadline, to avoid the penalty put forth by the NGT. The bidder consortium would also earn a good amount as the state government would buy the electricity at a higher cost that it usually does,” Baba said.
He said that the consortium of the three firms have to develop electricity and supply it to the nearby Wanganpora receiving station; only then would the Power Development Department buy it.