The government has permitted the firm to be chosen for the execution of the centralised waste-to-energy plant on 20 acres in Brahmapuram to mortgage the leasehold rights on the land for raising funds for the project.
The Secretary of the Kochi Corporation has been asked to hand over the 20 acres to the Kerala State Industrial Development Corporation (KSIDC) on lease basis. The government agency will sub lease the land to the firm short-listed for 27 years after due bidding process, with permission to mortgage the leasehold rights on the land for raising funds for the project only, according to the order issued by the Local-Self Government Department.
The KSIDC had invited tenders on June 24 for setting up an integrated solid waste management project with a waste-to-energy plant of 300 tonnes per day capacity on design, build, finance, operate and transfer (DBFOT) basis under the public-private partnership mode at Brahmapuram for the Ernakulam cluster of local bodies.
Move questioned
Reacting to the development, lawyer and environmental activist Harish Vasudevan pointed out that the firm would have nothing to lose if it exited the project midway as it had raised the investment by mortgaging government land. “Why should the government permit the company to mortgage the leasehold rights and also pay up for the higher tariff fixed for the electricity generated from the plant,” he asked. On the ‘Swiss model’ of tendering, Mr. Vasudevan wondered whether Switzerland or European nations would permit companies to mortgage government land for such projects.
Fresh tenders
The decision to float fresh tenders for the project was taken after the government cancelled the approval granted to GJ Nature Care consortium for setting up a waste-to-energy project at Brahmapuram on April 30. The Kochi Corporation had signed an agreement with the firm for implementing the project under DBFOT basis on February 17, 2016. The approval was cancelled on the ground that the consortium failed to submit the financing plan and related documents to demonstrate the financial closure even 1,400 days after the signing of the agreement.
According to the latest order, the Secretary of the Kochi Corporation has to take urgent necessary action to cancel the concession agreement executed with GJ Eco Power Pvt. Ltd for the implementation of the project. The civic body has to initiate steps to take physical possession of the land already transferred to the company for the project.
The government has taken a policy decision to establish 5 MW solid waste-to-energy plants at select sites in the State on DBFOT basis under the PPP mode. It has already permitted Thrissur, Kozhikode, Kannur and Kollam corporations to lease land in their possession to KSIDC.