Power substations in Jammu worth Rs 28 crores: Awarded and then denied. Why?

8th October 2020

8th October 2020

Under Integrated Power Development Scheme (IPDS) of the Union Power Ministry, there were plans to set up four technologically advanced GIS (Gas Insulated) substations in Jammu city at different locations. However, on October 5, 2020, Power Finance Corporation Limited cancelled the allocation of funds worth over Rs 28 crore.

This happened apparently because the Jammu Power Distribution Corporation Limited (JKPDCL) had not issued work orders to the firm-- JK Electric Engineers Private Limited (JKEEPL)-- which was to execute the projects. In its letter, dated October 5, PFC Limited wrote to Managing Director Yasha Mudgal (see image) regarding the cancellation of the projects.

Chief Engineer (Projects) JPDCL Manhar Gupta, when contacted, said: “We had done due diligence and all the ground work required for the GIS substations. Tentatively, 1. New Plot 2. Naibasti 3. PHE Mechanical Division office in Gandhinagar and 4. Residency Road had been identified as locations where the substations were to be set up”

He added that in case of any difficulties arising out of some unforeseen issues, the locations could have been changed. That question would have arisen only while executing the works. He said he could not comment on why the LoA could not be issued and what had led to the lapse of funds worth Rs 28 crore.

Incidentally, these GIS substations were to be set up by JKEEPL who were awarded the Letter of Intent (LoI) on May 26. In other words, the firm was awarded the tender. It conveyed acceptance on July 20.

The firm later wrote two reminders to the concerned authorities for issuance of Letter of Award (LoA) so that they could start work on all the four substations. However, nothing moved.

The company could get LOI after successful bidding of the tender. However, it was never issued LOA (Letter of Award) which would have meant final allocation of the project.

A letter from the MD's office in July had earlier stalled any work in connection with this tender. Incidentally, the Chief Engineer, Projects, JPDCL, Jammu, was directed by this letter "to request you not to carry out any further proceeding regarding the said package till further orders as CC-I has yet to take a final call on the said package".

It bears mention here that the PFC had earlier sent a letter to MD on September 9, 2020, regarding the GIS substations. In this letter, it had said: “In case the projects are not awarded by September 2020, PFC to suo motu cancel the project and Grants released (if any) to be adjusted/recovered from Utility and to be informed to the Monitoring Committee in next meeting.

In a way, it is shocking that the necessary sanctions for these projects had been received as early as in December 2018 after a lot of correspondence.

The allotment of funds from the Central government takes years as there is a cumbersome vetting process involved. So, it is with fund allocation for Power Development Department (PDD) of Jammu and Kashmir. It had apparently sought funds and Power Finance Corporation Limited had written to it on September 9 about funds allocated to it.

The project had earlier been given two extensions, both this year itself.

On inquiring about similar projects initiated in the Kashmir valley, some officials said that three GIS substations are being set up in Srinagar city. These projects are at different stages of construction and work is on in right earnest.

Arun Khajuria, who heads JKEEPL, the firm that could get LOI but was denied LOA later, when contacted, said: “We had placed advance orders for the necessary equipment with Siemens of Germany. We had done this after the award of LOI after becoming the lowest bidder for executing the work on four GIS substations.”

Sant Kumar Sharma, a seasoned journalist, is an authority on Jammu and Kashmir. Two of his books on Article 370 and Delimitation are already out. The third one on Indus Waters Treaty is now out and could be bought here.

Sant began as a teacher but after six years, joined the Indian Express, Chandigarh in 1990, the year when terrorism was taking its first step in J & K and soon there would be exodus of lakhs of Kashmiri Pandits from the Valley. He subsequently worked for The Statesman, The Times of India and Star News among others. He is based in Jammu since May 2000.

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