Greater Chennai Corporation has sanctioned Rs 145.67 crore for a project to in stall 30,000 LED street lights across the city after declining an offer from the Centre which would have entailed virtually no initial expense for the civic body. The corporation, in the latest council meet on January 29, had approved the project without any discussion.

Saurabh Kumar, managing director of Energy Efficiency Services Limited, (EESL) a joint venture of four central power sector undertakings, which has installed LED streetlights in many states, said it could have cost them just `37 crore, which they anyway would not have charged the corporation. EESL's earning would have been 80% of the projected savings the corporation would make from the switchover to LED in seven years, which works out to `21.84 crore.

LEDs are up to 50% more energy efficient than sodium vapour lamps, and have a lifespan of more than 50,000 hours, compared to the 5,000 hours of sodium vapour lamps.

Experts questioned the corporation's move to award tenders to local contractors instead of availing the Esco model. S Nagalsamy , a former member of Tamil Nadu Electricity Regulatory Commission, said: “The corporation may not have been keen on the Centre's LED scheme as it insists on conditions to ensure transparency in the project. But the fact that the civic body was in a hurry to pass such a huge project for which tender was called in a short time has raised suspicion.“

An official in the corporation council department said 82 tenders related to the LED project were categorised as `table agendas' a few minutes before the council meeting.The tenders were finalised on January 22, three days after B Chandramohan replaced Vikram Kapur as the corporation commissioner.

South Delhi, Bhubaneswar, Visakhapatnam and Jaipur have installed LED streetlights under the Esco model. “We replaced 94,000 LED street lights in Visakhapatnam at a cost of `70 crore. Their annual bill and maintenance charges have come down from `31 crore to `10 crore, and they are paying us `18 crore annually for a seven-year period. They did not make any capital investment, but are saving about `3 crore annually ,“ said Kumar.

Explaining why they didn't take up the Centre's scheme, a senior corporation official, who refused to go on record, said: “When we save on power bills, why should we share that savings with an external agency? The current project would benefit the corporation in the long run.“

However, he refused to comment when Kumar's calculation was pre sented, showing the corporation would have paid only `21.84 crore to the “external agency“, which is only 15% of what it has to spend now.

A financial expert who analysed the costs and specifications of the corporation project said it would take at least 36 years for the corporation to recover the cost. “Taking 12 hours usage for 365 days, the energy savings will be 7.1 MkWh. In monetary terms, the annual savings will be `3.9 crore. For an investment of `145 crore, the break-even period would be 36 years,“ he said.

Going by the annual savings of `3.9 crore, it will take nine years for EESL to recover the capital cost. But Kumar said that they would be able to recover the amount in seven years as there will be savings in maintenance and operational costs due to an automated control system in the LED street lights project.

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