So far as scams go, the 2010 Commonwealth Games (CWG) seem to be a bottomless well. DNA’s investigations have opened the lid on an altogether new chapter of CWG corruption — six new power projects commissioned ostensibly to meet the power needs of the CWG, when, first of all, Delhi did not need that power, and secondly, the PSU chosen to supply it, the Damodar Valley Corporation (DVC), was in no position — either financially or legally — to do so. With most of these projects nowhere near completion, the country is losing Rs15 crore daily, and over the last year, has already lost Rs5,000 crore.

When 70% of the villages in Jharkhand and West Bengal live in darkness, why was the DVC made to construct new power stations for the Delhi Commonwealth Games — power stations that never supplied a single MW of power to the CWG? Why was the Union power minister Sushil Kumar Shinde, so keen to get power from places 1,500 km away from Delhi?

On August 24, 2006, the DVC entered into a power purchase agreement (PPA) with power distribution company, Delhi Transco Ltd, for supplying 2,500 MW electricity to Delhi for the CWG. The six power plants would cumulatively produce 5,200 MW of power, and even after the Games, 80% of the power was to be sold to the outside states.

Power stations were sought to be located at six sites — Mejia, Durgapur, Koderma, Raghunathpur, Chandrapura and Bokaro — in the states of Jharkhand & West Bengal. “The entire project deal was meant for amassing money and favouring big corporate houses. The Games did not receive a single MW of power from the DVC,” said a top IAS official from one of the states, who was closely associated with the project.

The IAS officer said that soon after the deal, the then Union power secretary RV Shahi, along with the chairman of DVC, AK Barman held a meeting with the power secretaries of Jharkhand and West Bengal and told them not to oppose the PPP (power purchase agreement) between DVC and Delhi Transco Ltd. “He directed them not to make a hue and cry about it, as it was in the national interest, and offered them bribes to keep mum,” says the officer.

When contacted, Shahi denied having held any such meeting. “I never held such a meeting. These projects should have been completed,” he said.

Once the deal was in place, the scams came thick and fast. In this four-part investigative series, DNA will unravel the scandal of how the DVC top management, in connivance with the Union ministry of power, unlawfully gave contracts for the Raghunathpur thermal power plant (RTPP) on a single tender basis, and how the DVC, then a profit-making PSU, was set on the path of massive fraud and potential ruin. Even the other power plant contracts are mired in corruption, documents with DNA show.

Even the present chairman of the DVC, Rabindra Nath Sen, acknowledged that the deal was not required and has gone against the DVC. He said, “The wish list for supplying power for the Games was made without thinking. In fact, Delhi had excess power. The Delhi government actually had to shut down the Badarpur Thermal Power Station in 2010.”

DVC’s power projects were supposed to become operational in time for the Games in 2010. But the latest broad status statement of the Central Electricity Authority (CEA) indicates that for the 500 MW Koderma -I, 500 MW Koderma -II, 500 MW Durgapur -I , 500 MW Durgapur -II and 2 units each of 600 MW at Raghunathpur, the Commercial Operation Declaration (an announcement that the power plant is ready to produce electricity) has not been declared yet.

While the Chandrapura unit is the only one in commercial operation today, none of them were ready in time for the CWG. And the irony is that Delhi’s power distribution companies earned Rs764 cr selling their surplus power during 2010, the year of the CWG. And DVC, which supplies power to industrial consumers in the Damodar area, was actually unable to meet even their demand, let alone Delhi’s, during the period. (See box)The cost of the six projects were estimated at about Rs25,000 crore. According to norms set by the Central Electricity Regulatory Commission (CERC), DVC would have had to supply 30% of the total capital needed to set up these plants, and the rest of the funds can be from loans.

So, going by this formula, the DVC needed at least Rs7,000 cr to get the loan and start the projects. “The savings with the DVC when the project was approved was not more than Rs2,500 crore. Thus, it was impossible for the DVC to complete these projects on time,” said a senior DVC official who was in finance department at the time of the deal.

Moreover, according to the DVC Act, “The corporation shall carry out all or any of its functions and exercise all or any of its powers within the Damodar Valley,” which is spread across several districts of Jharkhand and Bengal. It adds that the company can carry out its operations in other areas too, but only when directed by the Centre in consultation with the concerned state governments.

However, the IAS officer said, “DVC never asked for permission from either of the state governments.”He further said that in 2007, both Jharkhand and West Bengal wrote several letters to the DVC suggesting that the PPA be cancelled, so that they can get more power for their states. But the then DVC chairman, A K Barman, had replied saying that the projects were in the national interest and so nothing much can be done about it. When contacted, Union power minister Shinde refused to comment.