Rs 30 crore OCW fined by NMC for lapses

 

 

Municipal Commissioner and Administrator Dr Abhijeet Chaudhari has imposed Rs 30 crore penalty on M/s Orange City Water, which is operating 24x7 drinking water supply project of NMC, for its failure to comply with performance efficiency target (PET) as well as commercial efficiency (CE). As per the agreement of OCW with Nagpur Environment Services Limited (NESL), a subsidiary of NMC, the former was to achieve technical efficiently of 60 per cent and commercial efficiency of 75 per cent by 60th month from commencement of services. OCW entered into scene of drinking water supply from March 1, 2012. However even while NMC is seen as acting tough against OCW, the Administrator’s benevolence was obvious as the Rs. 30 crore is to be recovered in 12 equal installments. During the one year, means till September 2025, NMC or NESL will deduct the amount from the monthly bill during settlement with OCW.

 

Similarly, OCW is paid charges at Net Operator Rate (NOR) after application of PET. However in year 2017, NESL opted for one time settlement (OTS) and PET was extended by further five-years. The rate of the Operator was rebased after 10-years and now Net Operators rate became applicable now. Net Operator rate is arrived at after deducting direct payment, it implies the payment by NMC or NESL for excess quantum of raw water and energy consumed by the Operator in comparison with contractual technical efficiency. As per the revised agreement, the operator was expected to reduce NRW to 40% at the end of 10th year and 25% at the end of 15th year. Ideally the NRW for the year 2022-23 should have been 37%. Unfortunately, NMC had to incur expenditure towards excess raw water lift and electricity charges for 72.59 MCM as the same was not met by the Operator.

 

The financial implication of these comes to Rs 30.02 crore. It may be recalled Vikas Thakre, MLA, and President, Nagpur City (District) Congress Committee, had alleged that NMC is favouring OCW despite latter's inability to stick to contractual agreement and failure to complete 24x7 drinking water supply project. NMC opted for OTS that caused loss of Rs 400 crores to the exchequer. Further OTS was conditional wherein OCW was mandated to rollout 24x7 throughout city by 1 March 2022 and failure to do so would make it liable to cover-up OTS benefited that was provided to it. Further referring to largesse to OCW, Thakre said that NMC was to reduce the net rate payable to former to Rs. 8.47/unit that would have resulted in payment of Rs. 108.7 crore but latter on its own opted to pay Rs. 10.81/unit leading to outgo of Rs. 138.72 crores that led to profit of Rs. 30 crores annually to OCW. Perhaps the NMC decision to recover Rs 30 crore from OCW stems from the facts presented by Thakre.