Meghalaya: More lapses detected in MeECL; CMD wants thorough probe

”It has been found out from the records that none of the proposals accepted by the SE (EM) are through calling tenders or expression of interest. There are many such traders in the energy market and proposals from only two have been accepted and have been issued the LoI,” he said.

The Chairman-cum-Managing Director (CMD) of the Meghalaya Energy Corporation Limited (MeECL), Arunkumar Kembhavi, has urged the State Government to set up an independent inquiry committee to investigate a case of alleged mismanagement in the Energy Management (EM) cell.

In a letter addressed to the Secretary of the Power Department, Government of Meghalaya, Kembhavi said he had ordered an inquiry into alleged violations of laid-down procedures in the EM cell.

He stated that Superintending Engineer (EM) H Jyrwa acted on his own volition upon receipt of proposals from energy traders ‘Arunachal Pradesh Power Corporation Limited’ and ‘Kreate Energy’ and had issued the Letter of Intent (LoI) for power banking at his level without consulting “his superiors or the undersigned.”

“He has not even marked a copy to anyone besides SLDC, the motives for which are unknown. This is in complete violation of all established norms, office procedures regardless of the board’s authorisation to SE (EM),” Kembhavi said.

”It has been found out from the records that none of the proposals accepted by the SE (EM) are through calling tenders or expression of interest. There are many such traders in the energy market and proposals from only two have been accepted and have been issued the LoI,” he said.

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Kembhavi also informed that Kreate Energy signed a five-year contract back in 2016 for power banking which expired in March 2021 and, he had rejected the proposal for extension beyond five years when it was proven that power trading was much more beneficial to the corporation than power banking.

“In the last six months, because of the competition ensured by the undersigned between the two traders, the trading margin has come down to Rs 2.75 from Rs 3 giving a net benefit of 25 paise per unit which is substantial. By not ensuring competition, the Energy Management has caused a huge amount of presumptive loss to the corporation in the last 10 years,” Kembhavi said.

“The total power supplied by MePDCL to other utilities though traders under banking arrangement from the financial year 2015-16 till November 2020 was over 1,700 million units. If they had sold the same power on IEX in the respective years, the total revenue earned would have been more than Rs 450 crore, as per the average IEX rates,” he said.

Besides this, Kembhavi alleged that Kreate Energy had been involved in large-scale embezzlement with Uttarakhand Power Corporation Ltd (UPCL). 

“The Director (Finance) of UPCL had written to the undersigned that MePDCL should adjust Rs 40 crore Kreate Energy owes UPCL from payments due to the trading firm. Three officials from UPCL are under suspension because of this incident,” he said.

“By trading with a company with such dubious credentials, Jyrwa has compromised the integrity of the corporation,” he added.

After being made aware of the developments, Kembhavi terminated the LoIs but, since Kreate Energy refused to comply with the termination of an already issued LoI, the same had to be converted into purchase order according to its “explicit wishes”.

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However, till date, Kreate Energy has not returned the power due to MePDCL for the power banked before that period (March and April 2021). 

“Meghalaya had to undergo massive regulation because of power shortage during this period which establishes the devious nature of the company in question,” he said. 

It was alleged that since there is no clause of late payment surcharges in the agreement with Kreate Energy, the latter had hoarded crores of rupees which should have been credited to MePDCL’s account on the very next day of trading. 

It was informed that because of the “indiscreet and imprudent” power trading arrangement with the two energy traders for 10 years, MeECL has suffered a presumptive loss of around Rs 134 crore which could have been saved had there been proper planning. The CMD, however, said that this needs citation and evidence.

Furthermore, he said, “Records point to certain cement companies having been favoured with the lopsided agreement of power banking potentially causing the loss of crores of rupees to the corporation.”

Kembhavi said that the transmission charges accruable to Meghalaya Power Transmission Corporation Limited (MePTCL), which should have been borne by the cement companies, were actually passed on to the MePDCL because of omission of the clause in the agreement. After lapses were unearthed, power banking has been discontinued. 

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“The same cement companies have now agreed to purchase the deficit electricity from MePDCL at normal industry tariff and the surplus from captive power plants will be injected back to the MePDCL grid at Rs 1 per unit which is extremely beneficial to the corporation,” he said. 

The CMD reiterated that probe into these lapses needs to be initiated and losses be recovered. 

“It is my considered opinion that the internal inquiry is inadequate to go into such magnitude. Hence the case may be referred to an independent inquiry committee outside of MeECL or handed over to an investigative agency as deemed fit by the competent authorities,” Kembhavi said.