The First Solar Project By SECI Marred By Corruption?
When Sachith KK returned to Perinjanam in Thrissur district of Kerala after a long stint in Dubai and USA, he had brought with him many plans for his village.
One of these was to make Perinjanam village a self-sustaining one.
In 2015, he stood for the local body elections and was elected ward member from Kadappuram South, one of the 15 wards within Perinjanam Grama Panchayat.
From amongst these 15 elected members, 48-year-old Sachith was elected President of the Perinjanam Grama Panchayat.
Once in office, Sachith searched for ways to execute his dream. One of the most ambitious projects he started was the project to generate electricity within the Gram Panchayat using solar power - a project which was named “Perinjanorjam”, mean Perinjanam Power in Malayalam.
With over 6000 houses in the Panchayat, the project had initially started with the aim to generate 1500 KW on the rooftops.
This led to a series of events which threatened to destroy the reputation and loss of money of all and sundry involved.
The Dream: A Solar Powered Village
“It was during one of the functions which I attended that I had a chance to meet Manoharan sir,” says Sachith.
TM Manoharan IFS, former Kerala State Electricity Board (KSEB) chairperson and back then the head of the Kerala State Electricity Regulatory Commission (KSERC) was the most prominent government official to have hailed from Perinjanam.
He was respected in the village and his ideas were sought to explore new programs that could be implemented in the panchayat.
“He said there are three-four things we could try in Perinjanam,” recalls Sachith.
“Thereafter we didn’t let go of him. We stayed in touch and the idea of an On-Grid solar power generation capability of 1500 KW within Perinjanam took shape.”
Manoharan was impressed by the panchayat President’s energy and felt obliged to extend help.
Enthused by the idea and the possibility of becoming the first Grama Panchayat in India to achieve On-Grid solar power generation on a large enough scale, they looked for possibilities to execute the idea.
Since the panchayat could not spare any money, the idea of pooling money from potential consumers was proposed.
For this, the Perinjanorjam Solar Upabokthre Samithi - a forum consisting of prospective consumers of rooftop electricity generation units was formed on 29 November 2016 following the decision taken by the Grama Panchayat on 22 September 2016.
The Panchayat it was decided would act as a facilitator.
“We conducted classes for interested people by inviting a local company who specialised in solar panel installations,” says Sachith. “But the costs they quoted were steep. The lowest they offered was Rs 92,000 per kWp.”
An average household needed to install a 2 kWp plant to be able to meet their needs fully. The project costs being prohibitive, they had to find another way.
Subsidy, SECI & GPR
In 2016, the Government of India initiated a scheme to promote rooftop solar electricity generation by providing a 30% subsidy under the 500 MW Rooftop Grid Connected Scheme.
The Solar Energy Corporation of India or SECI, a Government of India undertaking formed in 2011 under the Ministry of Renewable Energy was the nodal agency overseeing the scheme.
In early 2016, SECI invited tenders for rooftop electricity generation separately for each state.
GPR Power Solutions, a Chennai based company, had won the bid for Kerala.
GPR was allocated contract to install 500 kWp in the entire state of Kerala.
The Letter of Allocation required GPR Power Solutions to identify the consumers, install the solar panels and get them ready for On-Grid connections all by themselves.
The Letter of Allocation also mentioned the three other states for which GPR Power Solutions had won the bid, namely, an installation contract for a capacity of 1250 kWp in Maharashtra under Part-A (project size to be in the 25 kWp to 500 kWp range) and 500 kWp each in the states of Tamil Nadu, West Bengal and Kerala under Part-C (with individual installation size to be below 25 kWp capacity).
Perinjanorjam fitted well into the Part-C category with each individual consumer planned to be in the 1 kWp to 5 kWp range and none exceeding 25 kWp.
GPR Power Solutions having come to know of the project and the willing consumers in Perinjanam through the efforts of Manoharan, contacted the Samithi and agreed to install the entire 500 kWp allotted for Kerala in Perinjanam itself.
For GPR the arrangement meant that they did not have to search and identify willing consumers in Kerala.
Kerala State Electricity Board (KSEB) offered their cooperation with the On-Grid side of the project. They conducted feasibility studies upon registration and identified houses where On-Grid installations could be completed with feasible output.
For the Panchayat President and the Upabokthre Samithi, SECI, its subsidy and the rates which GPR offered seemed a bargain.
GPR had quoted a cost of Rs 65,000 per kWp installation in its winning bid to SECI. SECI’s subsidy covered 30% of the costs which came to Rs 19,500 and the consumers had to cover the rest - Rs 45,500 per kWp.
This was almost half as much as the local companies had asked the Samithi. The Samithi sprang into action.
The Upabokthre Samithi with help from the panchayat got the Perinjanam Service Cooperative Society to extend loans to those wanting to fund the installations on personal guarantees alone.
“The interest rates were 9%, the lowest,” said Sachith. “The government had also ordered banks to provide low interest credit for solar projects.”
A loan mela was held and Samithi members went from house to house to collect the necessary documents and get the loans passed.
“They said this is a scam,” says Premlal P, Convenor of the Perinjanorjam Solar Upabokthre Samithi about the response they got from local vendors when the rates were revealed. “They said it was never possible to supply at such cheap rates.”
The response of local vendors confirmed the Samithi’s evaluation that they had got a great deal and that the price was a bargain. This was to lead them into the folly which they regret to this date.
On 24 December 2016, the Perinjanorjam Solar Upabokthre Samithi signed a Memorandum of Understanding with GPR Power Solutions by which it agreed to undertake and implement grid connected Roof Top Solar PV system on the roofs of the individual houses of Perinjanam Village at a cost to the consumer of Rs 45,500 per kWp.
The MoU signed mentioned the date of commencement of the project as the first week of January 2017 and proposed completion of the first phase of the project as May 2017.
As a goodwill gesture, GPR agreed to execute a 20 kWp solar installation for the panchayat which was acting as the facilitator, for general village development.
This was at the insistence of the Samithi who demanded it to be included in the MoU before any money was transferred.
“That was the only time we felt that they had agreed to something just to make us release the advance money,” recalls Premlal P. “There was nothing else to suspect them.”
The MoU was signed for GPR Power Solutions by their General Manager S Damodaran and executed on 10 January 2017. Rs 84 lakh was transferred to the company in total. “Some through the cooperative bank as RTGS and others as cheques by individual consumers,” said Premlal.
The inauguration of the project was done by AC Moedeen the then Industries Minister of Kerala, on 26 February 2017. And for this, a few panels were installed in a hurry, according to Samithi members.
Inauguration done, advance transferred, the village awaited project completion which never came. “Weeks of inaction turned into months,” recollects Premlal P.
“No panels were brought, no installation began. The company officials would say one excuse after the other, those in Chennai soon stopped picking our calls,” he adds.
The field staff who had once numbered five, some of whom had even warned the villagers to be careful when giving money, gradually waned; eventually falling to just one.
The fall back story of the panel consignment stuck in Malappuram too stopped being repeated. “The sole employee was also not being paid salary,” said Premlal.
The company had been arranged a guest house for which the company had agreed to pay rent for. After three months, that too stopped. Worried, the Samithi’s correspondence moved from anxious phone calls to emails and snail mail.
Multiple correspondence ensued and eventually on 09 May 2017, GPR Power Solutions issued a purchase order to LV Solar Solutions, another Chennai based company for supply of 180 kW modules within a week’s time at Perinjanam village.
This was five months after the advance money of Rs 84 lakh was given by the villagers.
After supplying equipment for what they claimed to be worth Rs 1.3 crore, LV Solutions too went slow in their work. The project had hit another roadblock.
“LV Solar Solutions had no clue about the advance that GPR Power Solutions had taken from us when they came here,” says Premlal.
The Samithi paid LV Solar Solutions in part for the equipment they had supplied. This had already come to a total of Rs 54 lakh.
The Samithi had paid a total of Rs 1.39 crore to both companies combined but the project was going nowhere.
With installations not being completed citing paucity of funds, the project was left limping towards another indefinite delay.
Panels gathered dust on rooftops with no connections done for months on end, a few consumers told The Lede.
“Partial installations had been done on some rooftops but none were completed,” says Premlal.
In communications made in June 2018, a year and a half since the MoU was signed, GPR Power Solutions reported that work had been completed up to fixing of net meters in 44 houses.
This was a project which the MoU had said would be completed in a few months’ time.
In the letter dated 01 June 2018, which was the last communication by GPR Power Solutions according to the Samithi Convenor, GPR Power Solutions pinned the blame on the Samithi for non-payment of advance and held it as the reason for the delays.
It went as far as to ask the Samithi to arrange for payment towards the rented guest house by debiting the account of GPR Power Solutions at the earliest so that the company could pay the pending 14 months’ rent, a due then amounting Rs 84,000.
The Samithi, the letter claimed, had gone against the contract by not paying the 80% advance for the entire 500 kWp as was demanded by the company.
They had not received any payment from the Samithi after January 2017, the letter claimed.
“Had we given them more, they would have disappeared with that too,” is how a Samithi member sees it today.
“We were impressed by the smooth talking of Raghunathan,” says Sachith KK referring to the MD of GPR Power Solutions, Seenichamy Reghunathan.
“We were also a bit too eager to finish the project at the earliest. The rates were very low and this was a SECI empanelled company. We didn’t feel the need to be cautious. We took them as credible.” They had acted in good faith, he added.
When contacted, Raghunathan first refused to answer directly and issued a statement through Damodaran S, the then GM of GPR Power Solutions who repeated that - “The project was delayed as the villagers had failed to make the complete payment of advance on time.”
Damodaran first claimed to be presently working with another company and that GPR Power Solutions had only one employee, but on a later day added that now he works on a need basis as a part time employee.
Raghunath S eventually spoke with The Lede wherein he repeated much the same things as he had conveyed through Damodaran.
Interestingly, he referred to Damodaran as the Vice President of the company.
When told that Damodaran seems not to be aware of this position he apparently held, Raghunathan insisted that he was very much a part of the company.
Blaming the villagers for reneging on the MoU as signed between them and not paying the 80% of the total project money as advance he added, “We are going to initiate legal proceedings to sue the Samithi.”
Asked when and for what amount, he said - “At the earliest and the amount will be decided after careful perusal of all matters.”
That GPR Power Solutions is under financial duress seems to be clear by the message posted by Raghunathan S on his LinkedIn page but that does not solve anything for the villagers and the Samithi which took up a responsibility that was essentially derailed by his company.
“The only mistake we did was to release the advance money the way we did in good faith,” noted Sachith KK.
Once Bitten, Twice Shy
Halfway through 2018, having parted with a good part of the collected money and with the project nowhere near completion, the Samithi was restless to get things moving again.
“People were saying things,” said an executive member of the Samithi. Panels were lying half connected, some gathered dust on rooftops others in the rented godown.
Insinuations started doing rounds casting aspersions on the motives of those involved. Some whispers, Samithi office-bearers say, hinted at corruption. The dream was becoming a liability.
“The company can run away, we can’t. We would have had to leave the village itself,” is how one Samithi member saw it.
Desperation turned into resolve and when an opportunity at redemption came, they tried again.
“An inverter in one of the completed houses malfunctioned,” narrated Premlal, convenor of the Samithi about how the solution emerged. “For maintenance we searched for the supplier.”
Maintenance had been agreed to be undertaken by GPR Power Solutions as per their contract, but they had disappeared as had their sub-contractor LV Solar Solutions.
The chance search ended in the Samithi finding the sole supplier of the equipment in India - Chennai-based Suntastic Solar Solutions.
“They visited the village for repairs and during our interactions we told them about our unfinished project and the trouble the earlier companies had put us in,” adds Premlal. “They offered to finish the project for us.”
By then, it was almost two years since the Perinjanorjam Project had first taken shape in December 2016 and the price of solar panels and other equipment had reduced considerably.
The company agreed to finish installations at the rate of Rs 47,000 per kWp. This amount was being offered without any subsidy.
The Samithi pooled in more consumers and with the collected money proceeded towards project completion.
The Samithi entered into an MoU with Suntastic Solar Solutions on 23 July 2018.
The MoU laid down in detail the payment terms which was to be followed.
25% of the amount would be released after materials were supplied, 65% after successful completion of the project and the final 10% as two tranches of 5% each a year and the second year after completion.
“All the work that has reached completion today was done by them,” says Premlal.
“Like a cat that jumped into hot water once, we were twice careful,” was how one of those in the know put the payment conditions in the contract.
“The consumers are all happy today. Bills have reduced as promised and many more villagers have since approached the Samithi for installations,” says Premlal. “But we decided not to add any more houses as there are liabilities incurred which we haven’t settled yet.”
While works on the project by the new company was going on, the Samithi was again contacted by the previous two companies who wanted to get subsidies released from SECI.
A meeting was called and representatives of GPR Power Systems, LV Solar Solutions and SECI all came to Perinjanam on 26 November 2018 to negotiate a settlement.
With liabilities hanging overhead and payments pending, the Samithi was more than eager to cooperate.
Duped Once More
As per the Samithi’s minutes of the meeting on 26 November 2018, it was decided that SECI would release the subsidy amount as two tranches of two-third and one-third of the entire amount for 311 kWp for which papers had been submitted by LV Solar Solutions which was in trouble due to non-payment on the part of GPR Power Solutions.
But neither GPR Power Solutions nor LV Solar Solutions had completed the project as required.
According to Samithi members, completion had started only after the third company, Suntastic Solar Solutions came into the picture.
It held a contract only with the Samithi and had nothing to with either GPR Power Solutions, LV Solar Solutions or SECI.
Thus though having no direct contract with LV Solar Solutions, SECI took into consideration the conduct of GPR Power Solutions which had caused loss to both LV Solar Solutions and the Samithi and agreed to release the funds which could be shared by the two. The Samithi agreed to this.
The Samithi was given an assurance that they would be given an amount of Rs 15 lakh by LV Solar Solutions in lieu of the losses they had incurred due to the delayed and incomplete project while it took the rest of the Rs 18 lakh from the first tranche of subsidy.
The Perinjanorjam project meanwhile was slowly moving towards completion thanks to the perseverance of the Samithi members and the responsible efforts of Suntastic Solar Solutions.
Things were finally coming together for the project.
The Samithi was issued a cheque of Rs 15 lakh dated, 19 January 2019 by the representatives of LV Solar Solutions as part of the agreement and was asked to send a completion certificate in return.
SECI official when spoken to verified this.
The Samithi’s minutes, a copy of which was sent to SECI dated 13 May 2019, also mentions that it had been agreed to give to the Samithi the encashed bank guarantee provided by GPR Power Solutions - an amount of Rs 11,25,000.
The Samithi, in possession of the cheque given by LV Solar Solutions, issued an undated completion certificate which mentioned that installation of 311 KW had been completed on 23 March 2018.
The Samithi was trying to salvage their financial losses. But it was only later that it learned that SECI had released the first tranche of Rs 40 lakh (Rs 33 lakh after deducting SECI’s charges) to LV Solar Solutions and yet the company had not kept its end of the promise.
When the Samithi tried to encash the cheque that had been given to them, the cheque bounced. The account had no money.
The agreement, it seemed, had been reached by the company just to get the completion certificate necessary for release of subsidy by SECI.
When contacted by The Lede, Managing Partner of LV Solar Solutions, Kishore Kumar, insisted - “You should talk to GPR Power Solutions. It is their project, we are just a sub-contractor.”
He repeated the same throughout the multiple attempts to get their side of the story.
Their MD, P Satheesh Kumar, has remained unresponsive and all attempts to reach him has failed.
Third Time Lucky?
“All we want is that the rest of the subsidy is released to us along with the encashment of the bank guarantee given to SECI by GPR Power Solutions,” insist Sachith KK and Premlal.
An official of SECI who is in the know, on condition of anonymity, revealed that, “a decision could be pending in a month’s time.”
Asked what happened and where things went wrong he explained - “GPR Power Solutions delayed the project and the villagers got suspicious of their intentions which made them to withhold payment after the initial payment of Rs 84 lakh.”
“They never took consent of SECI before releasing the Rs 84 lakh. It was only when the company did nothing to execute the project that the villagers contacted us. We have taken a responsible position as the subsidy releasing authority.”
Asked about the demand of the Samithi he said - “We are looking into releasing the balance 10% subsidy to the Samithi.”
As for encashing the bank guarantee given by GPR Power Solutions and giving it to the Samithi, he said - “We are looking into it also. SECI has taken responsibility and our aim is to ensure smooth completion of the project for all concerned. Within the time period of the scheme the vendor has installed 311 kWp. The rest of the project has been completed by the Samithi themselves,” he adds.
That is something that SECI has to believe in though it seems unlikely to be anything but legal fiction, as the villagers and Samithi members’ accounts hint at the fact that the said 311 kWp was completed neither by GPR Power Solutions nor LV Solar Solutions.
Has any action been taken against GPR Power Solutions? “We have taken permission from the ministry for that. We are looking into blacklisting them and putting a ban on their bids,” says the SECI official.
Other senior SECI officials delayed response citing one reason or the other while some remained unresponsive when contacted by The Lede.
Asked whether there has been any punitive action from SECI on GPR Power Solutions, Damodaran S, the former GM of GPR Power Solutions who had signed the contract with the Perinjanorjam Solar Upabokthre Samithi and now claiming to be a part time employee replied - “None that I am aware of.”
This raises questions over the role of SECI in the whole episode. How did a company such as GPR Power Solutions come to be selected for the scheme for not one but four states? GPR by its owner’s own admission has been a non-performing asset for the past two years.
Why have there been such delays on the part of SECI to take any action whatsoever? What is stopping them?
Why did SECI side with GPR Power Solutions and LV Solar Solutions when releasing subsidy knowing very well that both had not conducted themselves as per the contract? These are for SECI to come forward and answer. SECI officials have refused to do that so far.
The Samithi members though insist that GPR Power Solutions has been blacklisted by SECI. It seems this version has been given to them by officials.
“Our project of 500 kWp has now been completed and we owe money to the company who helped us. That is our only concern,” say the officebearers.
The question that remains to be seen is, will SECI release the pending 10% subsidy and the encashed bank guarantee of GPR Power Solutions to the Samithi? The decision is due in a few weeks’ time.
If past experience is any indication, there are chances that the Samithi could get a rough deal this time too. And they know it very well. Their hopes rest on the conduct of the SECI officials. And they know it very well. Their hopes rest on the conduct of the SECI officials. They are muted in their evaluation of SECI officials’ conduct for fear of rubbing them the wrong way.
As for the experiment the Panchayat had undertaken, the Perinjanorjam Solar Upabokthre Samithi has held its own through the troubles.
It could very well be a model for other initiatives in the country wherein the panchayat’s role is limited to be the facilitator and ownership driven Samithi’s executes projects.
But for that, the Samithi will first have to be given a lifeline. And that hope rests on SECI.