Full bank guarantees of three solar companies encashed

The companies missed the last deadline of March 9 to commission solar power plants under national solar mission

 
By Ankur Paliwal
Last Updated: Saturday 04 July 2015

The bank guarantees of three companies, commissioned to install solar power plants under the national solar mission have been encashed. The companies failed to commission the power plants on time. The last date of commissioning was March 9.

In its monthly assessment the NTPC National Vidyut Vyapar Nigam (NVVN), the power trading arm of NTPC, found that four companies have been unable to commission their five MW solar photovoltaic power plants even after passing the third and last deadline of March 9.  These firms are CCCL Infrastructure Limited, Rithwik Projects Private Limited, Karnataka Power Corporation Limited and Camelot Enterprises Pvt Limited. These firms are setting up plants in Tamil Nadu, Andhra Pradesh, Maharashtra and Rajasthan respectively. “Full bank guarantee has been encashed of three firms. Rithwik Projects Private Limited has taken a stay from the court,” says an official of NVVN.

In keeping with Jawaharlal Nehru National Solar Mission (JNNSM) guidelines, the companies were asked to submit bank guarantees between Rs 9 and Rs 12 crore at the time of signing power purchase agreements on January 9, 2011. It was agreed that if a project developer misses deadline, NVVN could encash the bank guarantee in parts over three months, after which the project would be fined Rs 5 lakh per day for another three months. If still incomplete, the project would stand cancelled.    

A total of 28 companies were selected to set up five MW photovoltaic solar power plants each in the batch first of phase one projects of JNNSM. Of these, three firms have lost full bank guarantees. Five companies, including Alex Spectrum Radiation Private Limited and Electro Manufacturing Co Ltd, have lost second set of bank guarantees which is 40 per cent of the submitted amount. At least 18 companies have lost the first set, which is 20 per cent of the total submitted amount.

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