Chennai: Vengadamangalam plant may down shutters

The Rs 54 crore waste-to-energy plant at Vengadamangalam in Kancheepuram district, which is on a 20-year lease period with Essel Group, may close down even before it starts producing electricity.

CHENNAI: The Rs 54 crore waste-to-energy plant at Vengadamangalam in Kancheepuram district, which is on a 20-year lease period with Essel Group, may close down even before it starts producing electricity.

Three years after it was established, the State government is planning to pull the plug on the plant which handles waste from five suburban municipalities and replace it with localised compost pits. “We are in the process of terminating operations there because the plant hasn’t delivered” G Prakash, commissioner of municipal administration, told Express on the sidelines of a workshop on project implementation of water supply for Vision 2023.  

SP Velumani, municipal administration minister, who was also present, nodded in agreement.Presently, the 50-acre plant, operated by Essel Group, receives around 270 tonnes of mixed waste every day. The waste is then used to produce Refuse Driven Fuel (RDF). According to officials, 110 tonnes of RDF is produced everyday. This roughly translates into 4.5 MW of energy. However, with Solid Waste Management Rules of 2016 calling for segregation of waste at source and decentralised processing of waste, the amount of waste the plant will receive is expected to come down considerably.

The Anakaputhur and Pammal Municipalities have already stopped sending their waste to Vengadamangalam. “We can not break even if the amount of daily waste received is below 265 tonnes, the minimum mentioned in our agreement,” said a senior official from Essel Group, who claimed the company was already recording a loss of around Rs 30 lakh per month.

A costly affair

While the Vengadamangalam plant flouts the solid waste management rules by feeding machinery mixed waste to produce RDF, shutting down the facility will not be an easy task and will bleed the government of taxpayer money if its attempts to do so.  Since the plant is on a 20-year lease to Essel Group which ends only in 2035, the government will have to provide compensation if it breaks the agreement.

Currently, around Rs 18 lakh is paid to Essel Group for operations by the five municipalities and officials in-charge of the plant claim that a major chunk of the sum will have to be paid even if the municipalities stop supplying them waste, according to the agreement. “Around Rs 54 crores have been invested in the plant and the government has invested only Rs 8.5 crore. Recovery of investments will not be possible if the government stops supplying waste before the waste to energy production begins,” said a senior official at Essel.

Stalemate hinders Phase 2

The Essel group is yet to begin phase 2 — conversion of refuse driven fuel into electricity with the price per unit of electricity yet to be decided upon. While the group is looking to get Rs 7.59 per unit, the government is adamant about not giving more than Rs 6.16 per unit.Sources in Pallavaram Municipality, which is the nodal local body for the plant, told Express that arbitration is underway before the electricity regulation commission and hearings are scheduled to take place by this month end.

“By giving us a raw deal on the electricity we produce, and making the operation unviable, the government might try to get us to back out of the partnership,” said another official from the company,  indicating a great deal of mistrust between the two partners.

What will happen to non-recyclable waste?

Chennai: With the Vengadamangalam plant likely to be shut down, no alternative arrangement has been made for handling non-recyclable waste of the five municipalities. While officials claim they have adopted a zero-waste model, non-recyclable waste is an inevitability. With two former landfills in Pallavaram Municipality yet to be bio-mined, residents fear a new landfill will be opened. “We have struggled to ensure that the Periya Eri landfill and the Zamin Pallavaram landfill are biomined.

We don’t want another illegal landfill near our homes,” said a resident of Pallavaram. Despite tenders being issued months back, nobody has picked up the two biomining projects. Sources in Pallavaram Municipality claim that the Vengadamangalam landfill will be used. However, Essel officials claimed that such arrangements will be possible only if the government continues paying tipping fees.

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