NMC may terminate Essel’s waste to energy work contract

Nagpur: The Nagpur Municipal Corporation (NMC) has warned Noida-based Essel Infraprojects Private Ltd and Japan-based Hitachi Zosan India Private Ltd that it will terminate the contract for Waste to Energy project, and forfeit performance bank guarantee of Rs5 crore. The two companies have failed to start works on the project despite passage of two years since agreement was executed with the civic body.
On the directives of municipal commissioner Abhijit Bangar, NMC executive engineer Aniruddha Chauganjkar issued show cause notice to Essel and Hitachi a few days ago, asking why contract should not be terminated and performance bank guarantee of Rs5 crore forfeited. “Project is supposed to be completed by January 7, 2020, and commercial operations started. You have only cleared the project site by relocating municipal solid waste, but the progress of work is not proportionate to the time elapsed,” he said.
Chauganjkar added the companies are yet to set up their office at the project site, and they also failed to attend meetings to review the project’s progress. “Agreement was executed on May 4, 2017. Agreement for designated land of six acres was executed on August 8, 2017. Financial closure should have been completed within five months of land agreement, before January 8, 2018. Work was supposed to be completed within two years from January 8, 2018,” he said.
Chauganjkar also said NMC may face heft penalty from high court or National Green Tribunal (NGT) for delay in completion of the project. “There shall be enormous loss and damage to the environment along with financial implication if the commercial operation is not achieved within prescribed time period. The project is being monitored as per orders of high court, NGT and Neeri,” he said.
NMC is dumping around 1,200 tonne municipal solid waste per day at Bhandewadi dumping yard. NMC’s private operator Hanjer Biotech Energies Private Ltd is reportedly treating 150-200 tonne per day and manufacturing compost. Remaining waste is lying idle, causing environment pollution.
In a major advantage for Waste to Energy project, Maharashtra State Electricity Distribution Company Limited (MSEDCL) had taken a decision to procure 11.5MW power generated from the plant, in February 2018. Still, the project has been delayed to a great extent.
Sources say Essel is facing financial crisis. There are rumours in NMC that Essel may not be able to execute the project.
Project director from Essel Jeewan Sonwane told TOI civil works will begin at the project site from July. “Our head office has replied to NMC’s show cause notice. We have started to remove waste from remaining four acres from Monday. Site office has been opened. Project will be commissioned in given time period,” he said.
Sonwane added financial closure for the project has already been achieved from Power Finance Corporation Ltd. “We are taking this project as our ambitious one, so it will be completed. It took a long time for financial closure and various permissions,” he said.
DELAY WASTES GOOD OPPORTUNITY
Project: Joint venture of Essel and Hitachi — Nagpur Solid Waste Processing and Management Private Ltd — will develop Waste to Energy plant and generate 11.5MW power by treating 800 tonne garbage daily for 15 years. Project’s cost is Rs218 crore. NMC will give Rs70 crore obtained under Swachh Bharat Mission to operator. Remaining cost to be borne by operator. MSEDCL will purchase power. Operator will recover cost and returns from sale of power and tipping charges of Rs225 per tonne to be paid by NMC
Delay: Agreement executed between NMC and operator on May 4, 2017. Agreement for land signed on August 8, 2017. Financial closure was must before January 8, 2018. Project is supposed to be completed by January 7, 2020. No works started at the site. Even office yet to be set up
Loss: NMC is dumping over 1,000 tonne garbage per day without any treatment at dumping yard causing pollution. Project cost likely to increase if not completed in time