Awards amounting to nearly Rs 20-22,000 crore were expected within the coming months under the RGGVY scheme, said the Indian Electrical & Electronics Manufacturers' Association (IEEMA) in its May 2008 journal quoting the Union power secretary Anil Razdan.
He admitted that concerns had been raised about post-RGGVY issues and there appeared to be need to revamp the entire Accelerated Power Development Reforms Programme (APDRP).
Nearly Rs51,000 crore was likely to be invested in the distribution sector through the APDRP programme while more was expected to follow for the rest of the distribution sector, Razdan said.
The government was working out a financial plan for this.
Around 60 per cent of the 235 projects being implemented in the Tenth Plan were completed.
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Another 316 projects worth Rs16,000 crore were sanctioned between January to March 2008, to deliver electricity to more than 47,000 villages, give intensive power to more than 2,30,000 villages and provide electricity connections to more than 1.5 crore below-poverty-line (BPL) households. Of this, around 50 were already awarded and the rest were expected to be awarded within the next four to six months. Most of this work was going to be done in the states West Bengal, Bihar, Orissa, Jharkhand and Chhattisgarh in the next 18 months.
The major roadblock was material availability, as eastern India did not have sufficient manufacturing facilities for pole and other equipment, the IEEMA journal warned.
Another hurdle was the lack of turnkey contractors.
The 10-15 major contractors had bid for too many projects and as a result were overstretched.
One of the recommendations that recently emerged out of a national workshop on material components of RGGVY was that manufacturers could be developed into turnkey contractors for RGGVY projects, as some of the bigger engineering, procurement & construction (EPC) contractors were not keen on putting up distribution backbone over scattered, rural areas asd they had limited manpower. During the Tenth Plan period, there was delay in supply of material and execution of projects.
Prices of CRGO, copper and zinc had gone up significantly as well.
One of the reasons behind this spike in prices was the lack of a system of bulk purchase because the programme was implemented on a turnkey basis.
Individual implementing contractors approached materials suppliers but faced problems related to flow of funds.
The government has now compulsorily implemented electronic banking to track the flow of funds, said the IEEMA journal.