Irregularities worth ₹240 crores surface in PM-KUSUM tendering process in Kerala

Thiruvananthapuram: Serious irregularities have come to light in the implementation of the PM-KUSUM scheme in Kerala, a centrally-sponsored initiative aimed at converting agricultural irrigation pumps to solar power.

The Agency for New and Renewable Energy Research and Technology (ANERT), which is responsible for implementing the project in the state, has awarded contracts at rates inflated by up to 146% of the base price fixed by the Central Government. The ANERT CEO, who is authorised to invite tenders only up to ₹5 crore, invited tenders valued at a whopping ₹40 crore.

When contacted, ANERT CEO Narendranath Veluri told Manorama that the contracts had been issued through multiple smaller work orders. However, the original tender, invited in December 2022, was for a single contract worth ₹240 crore.

Further controversy arose when Kondaas Automation, the company that quoted the lowest bid in the 2022 tender, notified ANERT that it had mistakenly mixed up the price components of two types of solar plant models. ANERT subsequently corrected the figures and revised the financial statement. However, making such corrections on the tender portal after submission constitutes a procedural violation. As a result, Tata Solar, the company with the second-lowest quote, was awarded the contract.

ANERT also issued work orders to companies with lower technical gradings, which had quoted even less than Tata Solar, at the same elevated rate that Tata Solar was awarded. This led to certain companies receiving up to ₹69,000 extra per solar plant.

ANERT justified the decision by stating that technical gradings factored in parameters such as previous work experience since the contract also included long-term maintenance obligations. However, the agency has not clarified why companies with lower grades received contracts at the same higher rates.

After opening the financial bids, three companies that had not quoted prices for rooftop solar installations too were later awarded contracts for that very component.

Scheme structure

Under the PM-KUSUM scheme, both the Centre and the State are stipulated to contribute 30% each of the base price, while the remaining 40% is to be borne by the beneficiary. In Kerala, ANERT has arranged a loan from NABARD to cover both state and beneficiary shares. As a result, beneficiaries received the solar plants free of cost. This arrangement suppressed potential complaints about pricing and quality, allowing the irregularities to go unnoticed in the public domain.

The Power minister had earlier informed the State Assembly that surplus electricity generated by these plants would be sold to the Kerala State Electricity Board (KSEB). The revenue thus generated would be used to repay loans over a period of seven years.

Defending the agency’s decisions, Veluri said the base prices provided by the Centre were only indicative. “The cost of establishing a solar plant varies from state to state. To prevent inexperienced companies from quoting abnormally low prices and stalling the project midway, a grading system was introduced. All work orders were issued at the lowest price quoted by the company with the highest technical grade,” he explained.