Kerala Kaumudi Online
Wednesday, 25 May 2022 6.37 AM IST

Contracts that inflict heavy losses should be cancelled


The ruling governments are inflicting loss of crores of rupees on the people by not completing major projects on time and violating contracts. At least the money to complete two SilverLine projects has come as an unnecessary debt. For years, the government has been paying four to five times the interest on capital since compensation was not paid on time. Many are isolated incidents and do not receive much attention. The government has become like a pot with many holes, and the debt is rising through those holes. Many holes can be closed by the government if needed. But it is unfortunate that it does not happen. We had published the news that the Electricity Board was planning to cancel some contracts which would incur a financial liability of crores to KSEB. KSEB spends around Rs 4400 crore per annum on long term contract power. Shouldn't the pros and cons be evaluated before signing a long-term contract? Nothing like that has ever happened. If you sign a long-term contract, you will have to pay a fixed charge whether you buy electricity or not. That means you have to pay for the electricity you do not buy. If not, the big companies will go to court and show that they have breached the contract and take it away with compensation and interest. Even as hydropower can be more productive, our KSEB has been in the habit of reducing its volume and preparing the ground to buy power from outside instead. Who is behind all this? Not only the Minister but also the Board Chairman and the Power Secretary have a huge responsibility in signing the long term contract. Its bureaucrats know exactly how many crores these liabilities will impose on the people. It is learned that the major long-term contracts that are about to be canceled have been signed during the same period when an official was the Chairman and Power Secretary of the Board at the same time.

Due to more rains this year, more electricity was generated. However, due to long-term contract obligations, electricity had to be purchased at exorbitant prices. As a result, Kerala had to surrender 1780 million units of electricity from the central grid for just Rs 1.50 crore this year. All these losses are then placed as a liability on the shoulder of the common man. Electricity charges are already unaffordable to the common man. When crores of rupees have to be paid as compensation for unpurchased electricity, there is no way to reduce the electricity tariff. The rulers should not forget the fact that power is also big politics. The Aam Aadmi Party (AAP) has gained strength in Delhi by reducing electricity charges. Here too, the people cannot be blamed if they are willing to accept some who give the promise of halving the electricity charge. The common man carries that much liability now.

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