THIRUVANANTHAPURAM: Amid a standoff between the departments of Industries and Electricity over the operation of the Maniyar small hydroelectric project (SHEP) in Pathanamthitta, the decision of the government on whether a private industrial unit should continue to operate the power plant or hand it over to KSEB will be crucial.
The 30-year-old Build Own Operate Transfer (BOOT) contract between Carborundum Universal Ltd (CUMI) and KSEB on the plant is scheduled to end on December 30. It is said that a decision on its future operations is likely to set a precedent for similar projects. However, the government is treading cautiously as it involves a cheap source of energy on the one hand and industrial promotion on the other.
The 14 MW plant that generates 36 million units of power annually became operational in 1994. The agreement involved setting up the Maniyar SHEP on a captive power plant (CPP) basis for a period of 30 years. CUMI could utilise the energy generated from the plant for its factories in Palakkad, Thrissur and Ernakulam and excess energy could be fed to the KSEB grid at a mutually agreed rate.
As per the agreement, CUMI was supposed to transfer ownership of the project to KSEB in 2024. However, the private firm is understood to have proposed an extension of the BOOT period by another 25 years, which has got the backing of the industries department. However, the KSEB has resisted the move, taking into account the acute power deficit scenario in the state.
“The overall benefit that will be passed on to the consumer of the state during the 10-year tenure, on handing over of the project to KSEB, as per the agreement, will be around `139.58 crore,” KSEB had told the government through a letter, accessed by TNIE. The letter also pointed out that KSEB could sell the energy from the project during monsoon and save additional power purchase costs during summer.
A source in KSEB also said that the unique feature of Maniyar SHEP is that the plant could generate power throughout the year for as low as 50 paise per unit. However, the industries department has favoured continued operation by the private firm as part of its industrial promotion initiatives.
“The decision of the government on Maniyar will set a precedent for around nine projects operating with similar agreements in the CPP or independent power producer (IPP) mode in the state,” said P S Prasanth, of Kerala State Electricity Officers’ Confederation. As the departments of Industries and Electricity have taken divergent positions, the final call will be taken by the chief minister.