PSPCL in a spot, allots Rs1,500 cr power project at ‘escalated’ cost

Aman Sood

Tribune News Service

Patiala, December 11

An ambitious project to augment power distribution system in 40 towns across the state at a cost of Rs 1,500 crore has come under the scanner for “escalated” cost in tenders and the slow pace of work.

The delay in the project means that Punjab will continue to suffer power losses and the burden will be borne by the consumers.

The Rs 1500 crore restructured accelerated power development reform programme of Punjab State Power Corporation Limited (PSPCL) aims at reducing transmission and distribution losses. The Centre had approved Rs 1,717 crore loan to the state. At least 50 per cent of this amount will be converted into grant if the project is completed within the prescribed time and the aggregate technical and commercial losses are brought down to less than 15 per cent on sustained basis for five years.

Sources said one of the three companies (L&T, A2Z and Godrej) allotted the project was yet to begin the work and the PSPCL was yet to take any action. 

“Till date, the company handling the west zone is yet to start work while the two other companies are far behind schedule,” claimed Baldev Singh Sran, president, PSPCL and PSEB Engineers Association.

While the PSPCL management had decided to invite top companies on turnkey basis while allotting work in 2013, it ignored recommendations by its own committee which ruled against such a step. Despite no provision of subletting work to contractors, some companies have sublet labour contracts.

A PSPCL committee appointed in 2013 had recommended that labour-oriented construction activities might be outsourced and the contractor might be given an option to procure non-critical material such as GO switches, nuts etc with the approval of the competent authority. But all critical material should be procured by the department, read the report.

A similar project was completed in Patiala city in 2011-12 with labour being outsourced and material supplied by PSPCL. In this project, the per consumer expenditure was Rs 2,700 as compared to Rs 5,500 that would be spent under the present turnkey basis.

“This clearly indicates that there is large-scale corruption. Certain entities were favoured,” alleged Sran, adding that the pending work worth over Rs 400 crore which was yet to be allotted could be given as per the committee recommendations.

NK Sharma, Chief Engineer/RE and APDRP, who is overseeing the project, said the process to blacklist the defaulting company was on. “The tenders were floated on turnkey basis following Centre’s recommendations”, he said. Sharma was also part of the committee that recommended that critical material should be procured departmentally.

KD Chaudhri, Chairman and Managing Director, PSPCL, said reputed companies were selected for the project as it would have been difficult for PSPCL to buy material for Rs 1,500 crore project. Chaudhri said once the memorandum was received, action against the defaulting company would be taken. “Despite the delay so far, the companies will complete the work before schedule and positively by July 2015,” he stated.