Solar power scam reaches Bihar’s “Sushashan babu” Chief Minister’s doorstep


CobraPost-JantaKaReporter Exclusive brings to light a Rs 3 crore scam while purchasing solar lamps for Bihar Chief Minister Nitish Kumar’s residence, involving state government officials

Md Hizbullah

Another solar scam in Bihar has come to light following an RTI petition by activist Shiv Prakash Rai, this time at Chief Minister Nitish Kumar’s official residence.

In 2011, the Central government had proposed installing a solar plant at the chief minister’s residence and office premises, including his Janta Darbar. According to documents available with CobraPost-JantaKaReporter from the Ministry of New and Renewable Energy (MNRE), the total cost for the project was Rs 3 crore, of which 50 per cent was to be paid by the state government and the other half by the central government.


In the solar scam unveiled by Shiv Prakash Rai, Bihar Renewable Energy Development Agency (BREDA) then decided that the stated budget of Rs 3 crore was not enough, and quoted another price of Rs 4.50 crore.

According to standard protocol for the project, BREDA was to seek permission from the Union Ministry of New and Renewable Energy regarding the extra Rs 1.50 crore before executing the project.

This was not followed, leading the project being carried out in a haphazard manner.

In April 2013, the Comptroller and Auditor General (CAG) conducted an audit. In its report, the CAG stated that the project was faulty and blamed its late execution. It stated that Rs 40 lakh had been provided by the Central government and Rs 292.66 lakh by the state government to BREDA in early 2012 with a note (July 2012) for the work to start as soon as possible. Yet, there was a delay of 10 months.

In its reply to the CAG, BREDA said that the tender was cancelled soon after it was passed as the companies had not submitted their bids on the proposed time.

The Union Ministry of New and Renewable energy had quoted Rs 3 crore as the tentative cost, whereas BREDA had drafted a Detail Project Report (DPR)—which was not final—of Rs 4.50 crore.

On 28 March, 2012, a meeting was conducted by the Principal Secretary of Bihar’s Department of Energy where it was decided that prior permission was to be taken from MNRE for the added cost of Rs 1.50 crore.

It was also decided that after the final DPR is confirmed, selection of the company for the project will be done via standard procedures.

However, that did not happen. The tender was declared without the final DPR and permission was not taken from MNRE regarding the extra Rs 1.50 crore.

When questioned, BREDA said that since the project was at the CM’s residence, it was to be done as soon as possible; hence permission from MNRE was not taken. If that was the case, why was there a delay of 10 months to start work in the first place?

When highest bidder was awarded the tender

The tender was also passed to the company offering the maximum price in the list, leaving aside the eligible companies, costing and additional loss of Rs 3.04 crore to the government.

When the tender was opened in the presence of the Director of BREDA on 16 October, 2012, seven companies had participated in the bid, out of which Lanco Solar Energy Pvt Ltd from Haryana, Moser Baer Solar Ltd from New Delhi and Larson & Turbo Ltd from Chennai were eligible.

The prices offered by the companies, inclusive of all taxes, were:

Lanco Solar Energy Pvt Ltd: Rs 1.68 crore
Moser Baer Solar Ltd: Rs 2,29,24,896
Larson & Turbo Ltd : Rs 5,14,22,500

Lanco Solar Energy offered the lowest price at Rs 1.68 crore, but it had a drawback. The battery backup was 200AH x 240 x 20kmp x 5, lesser than the required capacity of 350AH x 240 x 20kmp x 5 mentioned in the tender. An additional Rs 11 lakh would have been required to raise the battery backup.

The tender was given to Larson & Turbo Ltd, which had quoted the highest amount among the three companies, and nearly three times the amount quoted by Lanco Solar Energy Pvt Ltd.

BREDA passed the tender to Larson & Turbo Ltd with the demand order of Rs. 4.72 crore.

If the contract had been given to Lanco Solar Energy Pvt Ltd at Rs 1.68 crore plus the additional Rs 11 lakh for the extra batteries, it would have completed the project at a cost of Rs 1.79 crore, far less than the Rs 5,14,22,500 quoted by Larson & Toubro. This would have resulted in a saving of Rs 3,35,22,500.

On 9 November, 2012, BREDA wrote a letter to the Principal Secretary of Bihar’s Department of Energy saying that after the completion of the work distribution process, the agreement shall be signed in the first week of December 2012 and the project will be executed.

In reality, the demand order was given without the work distribution done or the agreement signed. When the CAG conducted its audit between 15 April, 2013 and 29 April, 2013, half the project was over without any kind of agreement.

An advance payment of Rs 191.40 lakh was made to Larson & Turbo Ltd without any documentation. BREDA paid Rs 95.70 lakh to Larson & Turbo Ltd on February 5, 2013, and another Rs 95.70 lakh on April 15, 2013. The payment’s bill was not submitted by the company to BREDA. On being asked by the CAG, BREDA replied that they are trying to get the bill.

If installation of a mere solar plant at a government official’s premises results in so much chaos, it does not take much imagination how well the authorities will be working for the development of the state.

Not the first solar scam under Nitish Kumar

This is not the first solar scam to hit Bihar. In 2011, 427 people were arrested in the state in connection with a scam in the purchase of solar lamps during the panchayat elections.

The accused included village mukhias and 200 government officials, who were found guilty for purchasing solar lamps worth Rs 40 crore from unauthorised shops.

In 2014, a Rs 2,600 crore solar scam in purchasing and installation of solar lights in villages of all districts in Bihar came to light in which village mukhias, local officials and district bureaucrats allegedly siphoned off crores of rupees meant for buying solar lights to be installed in all the 8,463 panchayats and 534 blocks of the total 38 districts in the state. It was alleged that the officials bought sub-standard solar panels and batteries at low prices and raised high bills.

“Money has been digested in all its stages, taking the whole solar scam in one picture. Starting from the village mukhias, Block Development Officers, district magistrates and ministers and chief ministers, all have their hands dipped in this money laundering,” says Shiv Prakash Rai about the solar scams.


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