Despite implementation of a special package for providing agricultural pump connections to all farmers, the number of pending applications in Vidarbha has gone up in June as compared to March 2017. The reason is the boycott of tenders by MSEDCL contractors. Sources in MSEDCL said that the number of paid pending applications had increased from less than 58,000 in March 2017 to over 66,000 in June 2018. The reason is refusal of contractors to participate in the tenders for providing new connections.
MSEDCL contractors had boycotted the tenders earlier this this year. They wanted MSEDCL to substantially increase the base cost of the tender. After holding talks, the discom obliged by hiking it by 10%. However, the contractors were not satisfied as they wanted 25% hike. MSEDCL bosses told them during talks held recently that all of them should jointly decide to quote 10% above the new base price. This means that the project will cost at least 20% more than the initial estimate.
The state government had sanctioned Rs 750 crore for for removing the farm pump connections backlog in Vidarbha. Rs 350 crore was sanctioned in third quarter of 2017 under the package. MSEDCL floated a tender for Rs 150 crore but it was boycotted by contractors.
A contractor said that imposition of goods and services tax (GST) on electrical equipment’s was the reason for boycott of tenders. “A transformer earlier costing Rs 95,000 is now costing Rs 1.15 lakh. The cost of other equipment has also gone up substantially. However, MSEDCL has calculated the on the basis of pre-GST prices. It should have hiked the price by 25% but the increase was only 10%,” he told TOI.
Another contractor slammed MSEDCL officials for unrealistic assumptions. “After excise duty was abolished, MSEDCL reduced the cost of equipment in its calculations on this basis. However, it did not take into account GST,” he said.
Meanwhile, MSEDCL will be floating tenders for providing farm pump connections under high voltage distribution system (HVDS) this week. The discom plans to install two lakh transformers under the Rs 5,000 crore-plus scheme. Only two to three farmers will be given connections from one transformer there by preventing breakdowns.