NTPC Vidyut Vyapar Nigam Ltd (NVVN) has fined 14 companies, including three in which Lanco Infratech Ltd holds stakes, for missing a crucial project deadline.
NVVN, a unit of state-run NTPC Ltd, has encashed the bank guarantees submitted by these companies as they had not commissioned their solar photovoltaic projects within the 9 January deadline.
The projects to these 14 companies, totalling 70 megawatts (MW), were awarded under the first phase of India’s Jawaharlal Nehru National Solar Mission (JNNSM) by NVVN, the nodal agency for awarding them.
The three companies with equity participation from Lanco are DDE Renewable Energy Ltd, Electromech Maritech Pvt. Ltd and Finehope Allied Energy Pvt. Ltd.
Lanco also holds the engineering, procurement and construction (EPC) contract for their projects.
Among the other companies that were penalized are Amrit Energy Pvt. Ltdand Alex Solar Pvt. Ltd.
A total of Rs.28 crore in bank guarantees were encashed, with each project being penalized for around Rs.2 crore.
“NVVN has encashed the bank guarantees. They (companies) didn’t meet the deadlines. Lanco, apart from having 105MW, is doing EPC in seven projects and also holds some equity in them,” said Tarun Kapoor, joint secretary at the ministry of new and renewable energy.
“They have lost one portion of the bank guarantee and have been given two more months to commission the project. If they don’t commission it by then, they will be penalized again and will be given another three months for the commissioning,” he added.
Under JNNSM, projects totalling 610MW based on photovoltaic panels (140MW) and solar thermal technology (470MW) were awarded. Another award of 350MW based on photovoltaic panels was recently concluded with power-purchase agreements signed with 22 companies.
While a Lanco spokesperson didn’t respond to a late evening query, a senior NVVN executive, requesting anonymity, said, “The problem is that there is a deadline. We are following the guidelines in letter and spirit and the provision of cancellation of bank guarantees is already there in the power purchase agreement.”
JNNSM aims to install 20,000MW of grid-connected solar power by 2022.
A capacity of 1,000MW will be set up in the mission’s first phase by 2013.
NVVN has encashed the bank guarantees at a time when allegations have been made that Lanco Infratech contravened rules and got solar projects in excess of its entitlement through a network of shell companies.
The allegations were levelled as part of an investigation by Down To Earthmagazine published by the Centre for Science and Environment (CSE), a research and advocacy organization.
Lanco has denied the allegations.
“Investigations have revealed that these guidelines were blatantly flouted by Lanco Infratech. This company floated front companies and grabbed no less than nine projects worth 235MW,” CSE had said in a release earlier this month.
According to the allotment rules, a company was entitled to bid for and win one 100MW solar thermal and one 5MW photovoltaic project, making a single bidder eligible for a maximum of 105MW.
“This shows that Lanco has not been taking its work seriously,” Sunita Narain, director-general, CSE, said on Sunday.
“We are inquiring into the allegations. We expect to submit the report by first week of March. If it’s proven, then the projects will be struck off,” said Kapoor.
India has a power generation capacity of 186,655MW, of which only 20,162MW is generated through renewable sources such as solar energy.
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