It continues, "Lanco Infratech is the flagship company of the Lanco Group. Based on the guaranteed feed-in tariff being paid to solar projects in the first phase, the company will get assured revenue of INR 130 billion (Euro 2 billion) from these projects over a period of 25 years."
In July 2010, the Indian ministry (MNRE) issued guidelines for the selection of solar power projects under the first batch of Phase 1 of its three phase program. According to the detailed guidelines, MNRE would only accept one photovoltaic project application, worth five megawatts (MW), per company, "including its Parent, Affiliate or Ultimate Parent or any Group Company "
In the case of solar thermal projects, the guidelines specify that the "total capacity of solar thermal projects to be allocated to a Company shall be limited to 100 MW." As per the guidelines, one company was allowed to bid for, and win, one 100 MW solar thermal and one five MW photovoltaic project, i.e. one company was eligible to get 105 MW worth of solar projects.
Officially, in the winning bids for solar thermal projects worth 100 MW, Lancos name appears only next to the Diwakar Solar Project. Meanwhile, another Lanco subsidiary, Khaya Solar Projects, appears on the approved list of successful bidders for a five MW photovoltaic project.
What CSE says
However, according to CSE, Lanco has initiated work on a total of nine projects on 1,000 hectares in Indias Askandara village in Jaisalmer, Rajasthan. It says that, besides the Diwakar Solar and Khaya Solar projects, "it has found that seven more companies had direct links with Lanco – some have Lanco employees and their family members as directors, while others have strong commercial ties to the company."
Furthermore, "Lancos own annual report indicates that all the seven are firmly in its control. All seven companies had INR 0.1 million or INR 1 million in equity, no assets or reserves from the past; all were created for the bidding process; all companies increased their authorized amount of shares and then issued preference shares on the same day (December 31, 2010); the shares did not go to Lanco directly, but did show up in its annual report.
"Then all Lanco and front companies bid for the PV projects in a unified fashion, quoting similar tariffs with five paise (1 INR = 100 Paisa) jumps between each bid. The DPR of all projects are almost identical word for word, page by page. Even the land that has been agreements for the legally distinct and differently owned projects has been signed by one person a Lanco employee."
According to the guidelines issued by the Indian Ministry, the controlling shareholding of the company that has won the bid should not change for one year after the commissioning of the project. But CSE says that, in clear violation of guidelines, the companies have changed hands and are now fully (99 percent) controlled by Lanco.
In repose to the accusations, Lanco Infratech has issued a statement saying it has "serious objections" to CSEs allegations. CSE counterattacked this by stating, "Interestingly, Lanco has not denied the allegations. It has also accepted that it has ‘supported' the bidders, and that it has ‘equity participation within the permissible level'." pv magazine could not reach Lanco for comment.
Speaking to pv magazine, Chandra Bhushan, deputy director general at CSE said, "It is really sad that companies are using JNNSM to earn windfall profits. We acted on a lead and it led us to Lanco Solar and all these floated companies." When asked what course of action the government should take, he replied, "I think it is clear by the Supreme Court ruling on 2G, yesterday."
In an unrelated development, the Indian Supreme Court yesterday cancelled 122 licenses granted to telecom companies for "frivolous bidding".
pv magazine also tried to reach M.N. Srivastava, director of the National Solar Mission at MNRE for comment. However, his office refused to say what action it will take regarding this matter.
Speaking to the local media, yesterday, The Secretary, Ministry of New & Renewable Energy, Gireesh B. Pradhan, did say that if there are any facts that indicate violation, action will be taken. The Government will order a probe into the alleged contravention of one project-one proponent norm in the National Solar Mission, brought out by an investigation by the CSE.
CSE further asserted that the NTPC Vidyut Vyapar Nigam, responsible for the contracting, buying and selling of solar power, has still not put any information about these companies in the public domain. "It is indeed strange that even basic information like the addresses of companies that have been awarded projects, has not been made available. It is clear that the addresses remain unavailable because these companies either do not exist or have ceased to exist," said CSE.
CSE added that it has sent a Right To Information (RTI) application to the MNRE, which MNRE forwarded to the NTPC Vidyut Vyapar Nigam. NTPC refused to give out the information on the ground that it was not in the "public interest", however.
To address the situation, CSE believes that the procedures and processes of the JNNSM need to be improved and made more transparent. It has also called for more public scrutiny.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: firstname.lastname@example.org.