Huge anomaly found in dealings between MahaPreit and PMC; Suspicion about PMC being cheated about electricity rates

Pune : NpNews24 Online  – Pune PMC – Mahavitaran – MahaPreit | A huge financial anomaly has been found in the dealings between the Pune Municipal Corporation and Mahatma Phule Renewable Energy & Infrastructure Technology Limited (MahaPreit) regarding supply of electricity generated from non traditional sources at a cheaper rate compared to MSEDCL. MahaPreit earlier had sold electricity in Sangli district at the rate of ₹2.82 per unit but had sold electricity to PMC a the rate of ₹3.40 per unit. Now, MahaPreit and PMC have fixed the rate as ₹2.82 per unit. However, even after reducing the rates, due to the changes in the terms of the contract, the PMC will have to pay ₹39 crore, according to preliminary observation. There are murmurs in political circles that there is no transparency in the process when there has been a change in the state government and an administrator has been appointed in the PMC. (Pune PMC – Mahavitaran – MahaPreit)


The PMC is trying to purchase electricity from private parties in the open market instead of buying it from MSEDCL. Initially, the PMC had started the process of buying solar energy from ESSL. However, after ESSL withdrew, a proposal to purchase 2000 mw solar energy from MahaPreit was approved in May. The company expressed readiness to supply electricity at a lower rate than MSEDCL i.e. ₹3.40 per unit and it has been claimed that the PMC will save ₹28 crore every year. MahaPreit agreed to supply power at the rate of ₹3.40 per unit for 20 years and for free for next five years. A proposal which stated that the expenditure for land, setting up of the project and repairs would be borne by MahaPreit, was approved. Since the expenditure was more, it was decided to set up a SPV.


However, after an agreement was signed, it came to notice that MahaPreit was selling solar power in Sangli district at the rate of ₹2.82 per unit. Hence, the PMC demanded that it should be supplied power at the same rate and MahaPreit agreed. While agreeing with this demand, the old conditions were removed and it was mentioned that power will be supplied at the rate of ₹2.82 per unit for 25 years. As per the fist proposal, the PMC would have had to pay ₹1,050 crore. However, after reducing the rate and agreeing to free supply of power for the last five years, the PMC will have to pay ₹1,088 crore for 20 years. Even after reducing the rates, the PMC would have to pay ₹38 crore extra, according to preliminary observation.


Although MahaPreit is a government organisation, questions are being raised about its functioning. Problems about its functioning have come to the fore because different organisations have been supplied power at different rates. An agreement was signed last year to set up a SPV for the solar energy project. Eighty per cent of capital needed for the project will be raised from the market and the remaining 20 per cent capital be raised through share capital by MahaPreit and PMC. In the remaining 20 per cent share capital, MahaPreit’s share will be 74 per cent and PMC will have a share of 26 per cent. After an agreement with MahaPreit, a condition has been included that the SPV should be set up in 60 days. However, five months have passed since this period has ended but the SPV has not been set up. The PMC has had a correspondence with the chief secretary of the Urban Development Department but since it has not received a green signal, there is a question mark about the project.


MahaPreit has delayed the supply of solar power. Despite being a government organisation, it has offered to sell power at different rates to two organisations. Despite this, the company has been appointed as consultant for the project to modernise nine STP plants. On the one hand, the work of setting up 11 new STPs with the help from JAICA and the Centre has been started. JAICA has provided funds for the project. Despite this, no tenders were floated or no expression of interest was invited for the old projects and MahaPreit has been given the work only because it is a government organisation. Hence, the clouds of suspicion over dealings between MahaPreit and PMC are getting murkier.


Srinivas Kandul, Chief Engineer, Electricity department of PMC, said, “After it came to light that MahaPreit has quoted higher rates than given in Sangli, the proposal has been revised and has been approved. As per the new agreement, the PMC will have to spend an extra ₹38 crore in 25 years. However, while paying the electricity bill every year, the EMI will be less. This is a fact. Correspondence is underway with the UDD about the setting up of SPV.”



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