Centrally-funded power sector revamp scheme RDSS hits roadblock in state

TURA, Aug 6: The beleaguered Meghalaya Energy Corporation Limited (MeECL) has always had a very hard time when it comes to implementation of schemes provided by the Centre with the “scam tainted” Saubhagya Scheme being the latest among a long list of projects that hardly created any impact, barring a few places.
Now another central government scheme, Revamped Distribution Sector Scheme (RDSS) is on its way with the initial tender for all 12 districts floated sometime in the beginning of this year. However, despite the passage of almost seven months, the scheme is yet to even get off the ground over differences between the nodal agency meant for its implementation and the power authorities in the state.
The bone of contention is the huge difference in the amount sanctioned by the centre versus the amount being sought by the state for implementation of the scheme.
The RDSS is aimed at improving the operational efficiencies and financial sustainability of the power distribution companies (discoms).
It also aims to reduce the aggregate technical and commercial (AT&C) losses to pan-India levels of 12-15% and ACS-ARR (average cost of supply-average revenue realised) gap to zero by 2024-25. The nodal offices for the scheme are the REC and PFC.
The sanctioned work in the state broadly fall under two categories — the first being loss reduction works and the second smart metering works.
While the state has been sanctioned an amount of Rs 763.82 crore for loss reduction, another Rs 307.82 crore was also provided for smart metering works.
The bids that were submitted to the REC by MeECL stood at Rs 914.86 crore for reduction works (19.77% above sanctioned value) while smart metering works was bid at Rs 519.73 crore (68.84% above sanctioned value).
Recently, REC — the nodal agency of the scheme for Meghalaya — had written to the MeECL apprising them of the situation while it made some very keen observations in the bids made. The letter was sent on July 7 despite which no moves have been made to follow the suggestions of the REC by the state.
In the letter by the REC, mention has been made of the bid being substantially higher than the sanctioned rates with the agency asking MePDCL to undertake steps to either renegotiate or better still re-tender. None of the suggestions by the REC have been taken onboard by MeECL as yet for reasons best known to them.
“Furthermore it is seen that for the financial bid for smart metering works, the discovered unit rate is much higher of the bidder and it is suggested that negotiation is undertaken to match the unit rate,” suggested the REC letter.
In their reply to the REC letter, the MeECL stated its intent to allow the project to be undertaken at the discovered price put forward by the lowest bidders. Its reasoning was that the rates were adopted from the recently awarded works under Saubhagya and R-APRDRP.
“Costs have escalated manifold and the rates discovered under RDSS – Assam is higher despite Meghalaya being a hilly state with difficult terrain, scattered villages etc,” replied MeECL on July 19 to the REC while requesting it be allowed to reward the contract at the negotiated rates.
As per MeECL sources, the cost by the bidder includes the software component as well, which if given, would mean a huge financial implication to the state. Further with almost 2 lakh consumers already being covered, the numbers stated by the MeECL comes to a whooping 4.5 lakh consumers – more than what the state has.
As senior official from the MeECL, who preferred anonymity, clarified on the matter stating that the MeECL would be working with the REC in the implementation of the project in the state and the views of the agency would be worked on.
“Currently the matter is with the REC and what they instruct us next will be worked on. A meeting of the board of directors will be called as it was a collective decision. Re-tendering or negotiation will be done based on what the REC says next,” informed the source.
What is more interesting is the fact that the new REC project aims to cover a total of 4.5 lakh consumers – a number that the complainants say is beyond understanding.
Earlier the state had taken a loan from the Asian Development Bank (ADB) for the implementation of the smart meter scheme with a huge number of consumers already under its ambit (nearly 1.96 lakh as per sources).
The ADB smart meter scheme came at a cost of Rs 232 crore approximately, with Rs 78 crore going to purchase and installation of software. MeECL reportedly has a base of about 5 lakh consumers.
Given that a huge number of households have already been earmarked for the smart meter scheme under ADB, the question to be asked is how is the state still seeking smart meter works for over 4.5 lakh consumers?
“There is a growing feeling that the entire information has already been manipulated as there is no explanation otherwise. Further the MeECL has already established an Advanced Metering Infrastructure (AMI) under the ADB scheme. There is no need to take the software again. They only need to add to the database and ensure maintenance of the AMI system,” felt the source.
“When about 2 lakh households were covered, so where 4.5 lakh new consumers, to be covered under the scheme, come from when the entire consumer base of the MeECL is only about 5 lakh. It is taxpayers’ money being wasted and we are the ones that will have to pay for the transgression,” added the MeECL source.
Further if the software were to be bought once again and reinstalled, it would cost over Rs 150 crore (as per ADB estimates) while an augmentation of the same software would bring the cost down drastically.
The source added that Rs 5,000 per head has already been spent under the ADB loan scheme, the current implication, if the lowest bidder’s current prices are taken for a base of 4.5 lakh consumers as envisaged by the RDSS scheme, comes to over Rs 11,500 per smart meter.
On the allegation that higher numbers were being projected, possibly with the objective of siphoning of funds, the highly placed MeECL source informed that the numbers could not ascertained off hand and could only be clarified when the CMD (who is on training in the US) returns.
“Once the CMD gets back, more clarity on the matter can be made. A discussion on this will be undertaken to look at what is happening,” informed the source.