By CL Jose
Steps afoot to amend Tripartite Agreement seeking ownership clarity
THIRUVANANTHAPURAM/February 12-2022: The multi-billion-crore-rupee TransGrid 2.0 project has made enough buzz and headlines in the media, but has anyone ever bothered to know who will ultimately own its assets once completed?
And the question assumes increasing relevance as the much-trumpeted project is nearing completion. The Chief Minister, Pinarayi Vijayan, has drawn much pride from the project while briefing on the major feats of the LDF government.
The TransGrid project involves drawing fresh electric lines and setting up new sub-stations to strengthen the transmission and distribution system of the Kerala State Electricity Board Ltd (KSEBL), the sole distributor of power in the state, though a marginal producer. The project, once completed through all its phases, will have invested about Rs10,000 crore, according to KSEBL website
Citing the auditors of KSEBL, one can state that there is no clarity on the cardinal question of ownership of TransGrid yet, even as the project is trudging ahead leaving the completion date to anyone’s guess.
“In the absence of clarity as to the ownership of assets constructed or acquired for the project out of funds provided by KIIFB and the nature of amount received from KIIFB, we are not in a position to comment on the disclosure of assets and liabilities relating to TransGrid 2.0 Project in the balance sheet of the company as on March 31, 2021,” the auditors of KSEBL noted as part of ‘Basis for Qualified Opinion’.
Agreement silent on ownership
The tripartite agreement (TPI) signed among KSEBL, Power Department and KIIFB is silent regarding the rights/liabilities with respect to the assets constructed under the Transgrid project.
KSEBL has shown the asset acquired or constructed under the project as part of its ‘Capital Work in Progress’; amount funded by KIIFB as its liability, and advance paid to contractors as its assets.
As on March 31, 2021, a total of Rs1539.68 crore has been spent on TransGrid project, which has been envisaged to shore up the efficiency of power distribution in the state.
While KSEBL has spent Rs194.21 crore as of March 31, 2021, the Power System Development Fund (PSDF), constituted vide Central Electricity Regulatory Commission (CERC), has spent Rs542.91 crore, the remaining big chunk of Rs802.57 crore, being contributed by KIIFB.
KSEBL’s response
However, the KSEBL management said steps have already been taken by Director (Transmission and System Operation) to get the Tripartite Agreement amended for proper accounting of assets created under Transgrid 2.0 project.
It is also reliably learnt that in the meeting held on November 17, 2020, between the Chairman & Managing Director (CMD), KSEB Ltd, and CEO of KIIFB, it was agreed to make necessary amendments in the TPA to bring clarity on the ownership of the asset.
Enough controversies have already pounded the project under the patronage of commercial realpolitik mainly drawing on the discrepancy in the project cost and its attendant corruption stories. Interestingly, the media has been tossing around divergent figures as the project cost.
KSEBL is an implementing agency for the TransGrid 2.0 Project floated by the Government of Kerala and financed by Kerala Infrastructural Investment Fund Board (KIIFB).
