NMC refutes any foul play in LED contract

Source: The Hitavada      Date: 30 Aug 2018 10:17:40


Staff Reporter,

The low-cost LED bulbs are not even comparable, says Civic Body while claiming that project will save Rs 352 crore in next eight years


Nagpur Municipal Corporation has stoutly defended the contract awarded for installation of light-emitting diode (LED) under Smart Street Lighting project and claimed that in long run it would save crores while questioning the very foundation of a PIL based on incorrect information.

The High Court is hearing a suo-motu PIL and PIL filed by Adv Abhiyan Barhate alleging large scale irregularities in LED contract. According to information obtained by Congress corporator Sandip Sahare under RTI, the NMC purchased each LED light for Rs 9,900 which is three times the market price even in the retail market for this ambitious Rs 470 crore project aimed at saving electricity. According to Sahare, cost of LED street lights in local market is between Rs 3,400 and Rs 4,000 while alleging a scam worth Rs 100 crore in purchase of 1.38 lakh LED bulbs.

NMC in its counter claimed that this rates were quoted by one M/s Maheshwari Trading Company and became basis of media reports as well. The NMC has annexed copy of reply of M/s Philips Lighting India which stated that LED street lights mentioned in the quotation of M/s Maheshwari Trading are not only of different specifications but are not even comparable.

The NMC also refuted that contracts were awarded on 70-80 per cent higher rates and claimed that it was offered for 1 per cent below the tender rate. The NMC also pointed out that tenders were issued in 2016 and work orders were also issued last year while the controversy surfaced one year later on a very hollow edifice.

The estimated cost of this street light project is Rs 470 crore, of which Rs 277 crore is for replacement of existing street light panels with LEDs, Rs 106 crore for operation and maintenance of LED street lights for 84 months, Rs 59 crore for infrastructure development, and Rs 28 crore for works on Ring Road and Metro Rail corridor. Work orders for executing the works have been issued to eight private companies in January and payment to these contractors are to be made on deferred basis from the actual saving in electricity bill.

Till now, the local body has changed 35,000 street-lights with LED lights in the city of the total 1.38 lakh sodium vapour street lights into LED lights while remaining 96,000 street lights will be changed into LED by December 2018. NMC is changing damaged cables and poles also to strengthen the infrastructure. Electric Department has suggested to install LED lights of 150 volts each to stop electricity theft by slum-dwellers and others. The department will replace lights with those of 37 watt, 56 watt, 105 to 120 watt, and 170 watt capacity LED bulbs. All the bulbs are of dimmable categories. The giant in electric sector Philips Lighting is designing special bulbs for the city. Apart from illuminating dark spots across city, the project is likely to save Rs 352 cr for the civic body in next eight years.

The total savings in next eight years will be around Rs 352 crore and the payment to be given to the contractors will be Rs 270 crore in next seven years on deferred payment basis. NMC also will save Rs 82 crore from the difference between the savings and the payment made to contractors. NMC has claimed that Electric Department may also save Rs 76 crore on materials and manpower in these years. The local body will save total Rs 158 crore from this project, as per the present plan.

Presently, Electric Department pays around Rs 43 crore every year to Maharashtra State Electricity Distribution Company Limited (MSEDCL) for power supply to street-lights. Adv Amruta Gupta (Amicus Curiae) and Adv Shashibhushan Wahane (petitioner), Senior Counsel C S Kaptan (NMC), Senior Counsel M G Bhangde (successful contractor) are appearing in the matter.