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Failure of Ludhiana LED project will dissuade private participants: TATA

Failure Of Ludhiana Led Project Will Dissuade Private Participants Tata
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Ludhiana: TATA Projects Limited said on Monday that the failure of the LED project in Ludhiana will dissuade private participants in future public-private partnership (PPP) projects.

In a statement issued here, the company said that it has installed more than 1.02 lakh lights in the Ludhiana LED street lighting project, including maintenance activity.

However, since the installation in October 2020, Zones A and C’s monthly maintenance has not been paid. In addition, the maintenance for Zones B and D has not been paid for the last six months. This has unfortunately resulted in more than Rs 9 crore payment being overdue to TATA projects.

This is a PPP project under which it is only TATA projects that has invested into the replacement of one lakh plus lights and infrastructure.

The cost savings on electricity received due to the implementation of the LED street lighting project would fund the project. In fact, as per the project’s unique model, a portion has to be paid to TATA Projects Ltd for having invested and maintaining the project and another portion of the electricity savings would also be received by the administration without having invested anything.

Despite a win-win deal for the administration, the payments are held up, the company said.

The Ludhiana SMART LED project has achieved Rs 1.65 crore monthly savings for the city and its residents. This can be estimated if one considers the 64 per cent reduction on earlier monthly electricity bills of Rs 2.53 crore borne by the Ludhiana Municipal Corporation during the usage of conventional streetlights based on the quantity of installed LED fixtures as on date.

In addition, once more zones are fully handed over for project execution – the monthly electricity savings shall increase.

With the contract tenure at seven years, the total savings on electricity charges can be estimated at around Rs 143.34 crore. In fact, the savings on energy costs since August 2021 has already reached Rs 13.89 crore.

It is from these electricity savings already being enjoyed by the administration due to project implementation that TATA Projects Ltd has to be paid.
While the administration continues to enjoy electricity savings, it is not paying TATA Projects Ltd as per its contractual obligations.

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