Times
of India: Nagpur: Tuesday, 21 July 2015.
More
irregularities have come to fore in Nagpur Municipal Corporation's LED street
lights project. Launching the project two years ago, the civic body had claimed
that the project would be executed without any cost and totally based on energy
saving payback system. However, copies of the work order and agreement revealed
that the NMC will end up paying a whopping Rs 336 crore to the private company
JK Solutions In over 16 years. The amount is four times more than that invested
by the private company.
There are
many other points which suggest that it is more favourable to only the private
company and nothing comes into the kitty of the cash-strapped NMC, except the
claim of energy saving.
The NMC had
time and again claimed that the private company will invest in erecting LED
street lights and ensure operation and maintenance for 16 years. The NMC will
pay the company the amount saved from energy conservation. Citing the model,
the NMC had entered into an agreement with JK Solutions In on May 16, 2014 for
replacing existing 26,712 sodium vapour-based street lights with LED street
lights within 18 months of issuance of work order and operation and maintenance
for 13 years that is extendable by another three years.
RTI documents
revealed that the private company will invest only Rs 80 crore on the expense
of LED luminaires. The NMC will pay total expense of replacement of existing
street light poles, cables etc that comes to around Rs 43.41 crore. The NMC
will pay additional amount of Rs 3.25 lakh per feeder panel for setting up
dimming system in the street lights. This will cost around Rs 37.37 crore for
1,150 feeder panels.
Besides, the
NMC will pay charges for operation and maintenance of 26,712 street lights for
16 years. The rate finalized is Rs 66 per street light/month. The rate is 10%
above the estimated cost. Shockingly, the NMC had agreed to increase the rate
by 12% every year for 16 years. This seems more than what is needed as consumer
price index and wholesale price index increase by only 5-6% every year. Thus,
the NMC will end up paying around Rs 90.14 crore for operation and maintenance
for 16 years.
If the energy
saving payback system is calculated, the NMC will pay amount of Rs 165 crore to
the private company for 16 years.
A financial
expert, on the condition of anonymity, told TOI that the model could have been
transparent had the NMC given contract to the private company, asking it to
invest each aspect of the project and pay it as per quantum of energy saved.
The expert
added that the NMC would have even benefited had the agreement been executed on
deferred payment basis in which the civic body is supposed to pay back the
amount invested by the private company with a rate of return. The model is
implemented in two water treatment plants' projects.
In violation
of agreement, the NMC is providing its hydraulic vehicles to the private
company for the last one year. As per the agreement, the private company has to
arrange its own vehicles within 180 days from issuance of work order. The NMC
had agreed to provide four-wheeler laden hydraulic machine at the rate of Rs
2,150 per day which is the cost of one air-conditioned taxi.
In the work
order, the NMC had made it very clear that the private company has to begin the
project from Mangalwari zone followed by the remaining nine zones. The zone office
had submitted a list of eight roads but did not taken them up till date. The
project kicked off from Dharampeth zone.
An NMC
official from electrical department had denied any favours to the private
company in the agreement.
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