Bhoothathankettu project stalled over contract dispute; Rs 32 crore production loss for KSEB

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Thiruvananthapuram: Due to certain internal disputes in KSEB, the functioning of the Bhoothathankettu hydropower plant is stalled. The reason for this is KSEB expressing doubts about the contract and non-payment of money. The project can generate 24 MW of electricity if Rs 12 crore is spent. The plant endures Rs 34 crore in production losses every year due to such contract disputes.

This project aims to generate electricity using excess water from Bhoothathankettu dam. The project amounting Rs 231.21 crore was commissioned in 2016.

The contract was awarded to a consortium of Sree Saravana Engineering Bhavani Company (SSEB) and Hunan Zhang Equipment Generating company. 99.7 percent of civil, 88.61 percent mechanical works have been completed. Only the installation of the final machine is left.

The problem arose when the financially crunched SSEB failed to pay Hunan Zhang to install the equipment. As this detrimentally affected the project, KSEB intervened.

SSEB Hunan Zhang and KSEB entered into a tripartite agreement on April 27. However, when the KSEB chairman changed, the contract fell into dispute. The current position of the board is that the contract will not stand as one of the parties is a Chinese company. KSEB wrote to the government seeking intervention but without any action, the project stalled.

As the project is 90 percent complete, fresh tender cannot be called and KSEB has suffered a production loss of Rs 32 crores due to the non-completion of the project. At the same time, if the current contract is cancelled, it will affect the warranty of the equipment.

Minister K Krishnankutty said in the Assembly that no decision can be taken at present regarding the commission of the Bhoothathankettu project. The actions were taken as per the KSEB’s decision. The commissioning issue can be fixed only based on the steps taken by the board in this regard, he added.

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