The Local Self Government Department (LSGD) has, by a Government Order (GO) issued on Thursday, cancelled the approval to set up a waste-to-energy plant at Brahmapuram here.
The Kochi Corporation will now take steps to terminate the concession agreement with G.J. Eco Power Pvt. Ltd. to set up the plant at a cost of ₹295 crore. Further, the Kerala State Industrial Development Corporation (KSIDC), the nodal agency for the implementation of the Urban Solid Waste Management Initiative, will invite fresh proposals to select another company.
According to the GO issued by LSGD Principal Secretary Sarada Muraleedharan, the company had delayed achieving financial closure and commencing construction work. It had signed an agreement with the corporation in February 2016. The company was required to furnish its financing plan and financing documents 180 days after signing the agreement, but it failed to do so, the GO noted. A GO issued in January this year required the company to achieve financial closure within 30 days — another deadline that it failed to meet.
In September 2019, environment clearance had also been granted for the project. Though the State Level Advisory Committee on Waste Management chaired by the Chief Secretary had asked the company for its financial capability in March, it had failed to produce satisfactory evidence.
The GO noted that rather than taking steps to ensure financial closure, the company had only delayed the execution of the project by asking for relaxations and modified support such as a 100% guarantee from the State government for debt approval and conversion of the concession agreement into a lease agreement.
For a project that was touted to be a solution to the city’s waste management troubles, this was another hurdle in an already long-delayed process, said V.P. Chandran, member, health standing committee.
“The Chief Minister had laid the foundation stone at the site in 2018, but work has not progressed since then. Instead, the company demanded that its concession agreement be converted into a lease agreement for around 20 acres. Though the corporation council was against a lease agreement with the company, the government granted permission for it earlier this year,” said Deputy Mayor K.R. Premakumar.
Opposition Leader K.J. Antony called for an urgent council meeting along with district administration officials to discuss the matter since waste from other local bodies in the district would also be brought to the plant. “There was no transparency in the process right from the start. The company seems to have no experience in the matter,” he said.
Ernakulam District Residents Association Apex Council (EDRAAC) president P. Rangadasa Prabhu said the body had sent a memorandum to the Chief Minister on the matter. “Lots of hurdles were crossed to obtain permission for the project, and the State government had sanctioned it. Some time should be given to the company to prove its financial ability, considering the lockdown. It is not right to cancel the agreement since the government has not given any subsidies to the company,” he added.
Meanwhile, in a statement, GJ Eco Power said, “The project is well on, and all speculations about an uncertainty in its completion are not factual.” The concession agreement had not yet been cancelled, and no process to do so has been initiated. The significant delay in project permit clearances had discouraged committed international investors from supporting it, and many had backed out, the company said, adding that over ₹35 crore had already been spent by the company on project development, civil work, engineering and equipment orders. The company is in talks with the authorities concerned and is hopeful of sorting out the confusion.
