Kollam: In a move raising legal and ethical concerns, the state government has amended its power policy to facilitate the leasing of the Maniyar Small Hydroelectric Project to Carborundum Universal for 30 years. This amendment removes a legal hurdle originating from the 2013 power policy, which granted the Kerala State Electricity Board (KSEB) exclusive rights over water from its dams. The revised policy now permits water usage by KSEB or any agency designated by the government, paving the way for private sector involvement.

The draft of the newly issued power policy explicitly outlines this change. Senior officials suggest that the amendment is aimed at preempting legal challenges against the handing over of the project to Carborundum Universal. In addition, this modification is expected to aid in renewing contracts for other private companies with agreements nearing expiration in the next four to five years.

KSEB had signed a 30-year Build, Own, Operate, Transfer (BOOT) agreement with Carborundum Universal Limited on May 18, 1991. The 2013 power policy, introduced during the Oommen Chandy government’s tenure, did not retroactively affect this contract.

The Maniyar Small Hydroelectric Project draws water from KSEB’s Sabarigiri (Moozhiyar) Hydroelectric Project. Under the existing power policy, renewing the contract with Carborundum Universal would not have been possible without this amendment.

Carborundum Universal Limited began production in 1994, with the contract expiring in December 2024. The original agreement stipulated that all machinery, including generators, be handed over to the state upon the contract's conclusion. Although KSEB formally requested the Department of Power to initiate the project’s takeover, no subsequent action was taken. 

Instead, the government opted to extend the contract with the private firm, though the renewal has yet to be officially finalised.