All eyes are on the Electricity Board as the two vital contracts are on the verge of expiring in a few days. Many fear that the controversy over the contract will lead to a strained relationship between KSEB and the government in the coming days. The Industries Department wants to extend the expired Maniyar hydropower contract to the Carborundum Company. This company has been using electricity from here since the commencement of the project and is availing this facility freely at the expense of the state. Concerns have been raised that the Board's desire to end the arrangement after the expiry of the contract will be thwarted by the interference of the Industries Department.
It has been revealed that the board and the departmental minister are not interested in giving the power generation-consumption contract from the Maniyar project to a private company for another twenty-five years. Departmental Minister K. Krishnankutty told the media that the final decision will be taken by the Chief Minister. Maniyar is one of the small hydropower projects that can generate electricity at a low cost. Electricity worth Rs 22 crores is being received from the project without interruption.
It looks evident that the Board, which has been buying power from outside (private players) for a huge amount of money and supplying it to consumers at high rates, is wasting an opportunity by not utilizing the Maniyar project. While the extension of the contract would be good for the company, it would hardly be beneficial for the state.
After the Maniyar controversy, Kayamkulam thermal power station issue is also haunting the electricity board. The Board has been paying Rs 100 crore rupees every year as per the contract to Kayamkulam thermal power station which stopped power generation years ago. The board was looking to get out of the tangle after the contract expiry but a big blow came their way after NTPC warned of electricity disruption if the contract is not extended. It is unprecedented for a public sector organization to command in such a fashion.
It is well known that the first party to the contract has the right to decide whether to renew or not after the expiry of a contract. Thermal power, with a production cost of Rs 14 per unit, was shelved after the board deemed the whole project to drain their revenue reserves. More than four thousand crore rupees have already been paid for the Kayamkulam thermal plant. The board escaped from the quandary after putting a tariff hike on electricity only for the poor consumers to bear the brunt.
Rumour has it that the team is making efforts to extend the contract by paying Rs 100 crore per year in the name of a fixed charge. It is wise to terminate the contract after the expiry date. Meanwhile, Kerala should seek legal respite to come out of the predicament brought in by NTPC.