Thiruvananthapuram: The decision to appoint a consultancy firm for implementing projects in the Kerala State Electricity Board (KSEB) with private sector participation has sparked controversy. Employee unions have alleged that outsourcing tasks that could be handled by KSEB officials themselves, at a hefty consultancy fee, is unnecessary and wasteful. The contract in question also mandates that investors availing loans must pay commissions.

SBICAPS, the consultancy, has been assigned the responsibility of preparing project reports, securing investments from the private sector for renewable energy projects such as solar and wind power, and setting up pumped storage facilities. The firm will also work on the realisation of these projects. For this, a representative from the consultancy will be stationed at the KSEB headquarters for six months, with a payment of Rs 30 lakh. An additional Rs 60 lakh will be allocated in different phases for other operations.

Success fees and loan arrangements 

As per the agreement, for projects exceeding 30 megawatts, the consultancy firm will receive a success fee. This fee structure includes Rs 3.75 lakh for projects between 30 and 50 megawatts, and a payment of up to Rs 1.75 crore and Rs 9 lakh per megawatt for projects between 50 and 200 megawatts. For projects above 200 megawatts, Rs 4 crore and Rs 3.75 lakh per megawatt must be paid. 

In addition, when applying for a loan, Rs 10 lakh must be paid upfront, and if the loan is sanctioned, 0.25% of the loan amount will be deducted as an arrangement fee.

KSEB’s justification

Over the past 15 years, project implementation has been lagging. KSEB has set a target of generating 10,000 megawatts of power by 2030. In this context, the board argues that the consultancy is essential for attracting investors to already identified projects and expediting their execution.

Trade unions raise corruption charges

Opposing the move, the Kerala Electricity Employees Confederation (INTUC) has alleged that outsourcing these tasks when there are experienced officials within KSEB is an attempt to facilitate corruption. The organisation’s state working president, C Bikkutty Francis, has strongly criticised the decision.