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• Govt to order inquiry into CSE allegation that Lanco broke rules to win projects in excess of its entitlement
• New Delhi: Indian energy and construction company Lanco Infratech Ltd on Wednesday denied that it had broken rules to win solar projects in excess of its entitlement through a network of shell firms.
• File Photo
• The allegations were made in Down To Earth, a magazine published by research and advocacy group Centre for Science and Environment (CSE).
• “We would like to place our strong objection regarding their report, as the allegations were not crosschecked with the company and were wrongly perceived,” Lanco said in a press release.
• India’s ambitious Jawaharlal Nehru National Solar Mission aims to install 20,000MW of grid-connected solar power by 2022. A capacity of 1,000MW will be set up in the mission’s first phase by 2013. NTPC Vidyut Vyapar Nigam Ltd (NVVN), a unit of state-run NTPC Ltd, was the nodal agency for the award of the projects.
• The government said it will order an inquiry into the allegations made by CSE. “The inquiry will be conducted by an individual or a panel,” Tarun Kapoor, a joint secretary at the ministry of new and renewable energy, told PTI.
• “If any violations are found, strict action will be taken,” Kapoor said.
• According to the allotment rules, a company was entitled to bid for and win one 100MW solar thermal and one 5MW photovoltaic project, making a single bidder eligible for a maximum of 105MW.
• “Investigations have revealed that these guidelines were blatantly flouted by Lanco Infratech,” CSE said in a release on Wednesday. “This company floated front companies and grabbed no less than nine projects worth 235 MW.”
• Lanco said in its response that it was not in breach of the rules.
• “Lanco Group has equity participation in few of the companies that have won the National Solar Mission projects in 2010,” it said. “Equity participation of Lanco is within the permissible level allowed and is in line with the RFP (request for proposal) documents, and these facts were also reported in Lanco Infratech Ltd’s annual report.”
• Projects totalling 610MW based on photovoltaic panels (140MW) and solar thermal technology (470MW) were awarded in the first phase to 28 companies by NVVN. Another award of 350MW based on photovoltaic panels was recently concluded with power-purchase agreements (PPAs) signed with 22 companies.
• NTPC chairman and managing director Arup Roy Choudhury and Anil Kumar Agrawal, NVVN chief executive officer, maintained that bid provisions were not violated. Agrawal said, however, that some violations that had been spotted were rectified.
• “Sunita Narain (the head of CSE) is a responsible Indian citizen and should have first sat with us and understood the provisions. What she is saying is absolutely wrong,” Choudhury said.
• “There is no case today for cancellation of contracts,” Agrawal said.
• India has a power generation capacity of 186,655 MW, of which only 20,162 MW is generated through renewable sources such as solar energy.
• “According to the guidelines, participation in the RFS (request for selection) had to be one company one project,” Agrawal said. “While submitting the RFS, companies had declared that no affiliate, group or parent company is participating in the bidding.”
• NVVN also checked whether the companies selected were inter-linked, he said.
• “Accordingly PPAs have been signed with independent companies. Further, there is no bar in the guidelines for a company to be EPC (engineering, procurement and construction) contractor in more than one project,” Agrawal said.
• After PPAs were signed, NVVN observed that a controlling stake in some of the companies appeared to have changed hands in violation of guidelines, he said.
• “After obtaining legal opinion on the issue, NVVN issued notice of default to such companies, although the companies stated that they had not violated the provisions of guidelines and (that) it was a matter of interpretation,” Agrawal said. “However, in order to resolve the issue, the concerned companies finally have rectified the default.”

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