The Kerala power purchase deal for 200 MW of electricity from VEH Global has come under scrutiny after Leader of the Opposition Pinarayi Vijayan alleged that the agreement was signed without competitive bidding or approval from the state electricity regulatory commission.
In a statement reported by the Times of India, Vijayan alleged that the government agreed to buy electricity from VEH Global at Rs 11 per unit, based only on offers received. He said the decision was taken last month and that the arrangement had not yet received approval from the state electricity regulatory commission.
Vijayan referred to Sections 62 and 63 of the Electricity Act, which, according to him, require electricity prices to be determined either through a regulatory mechanism approved by the commission or through competitive bidding. He alleged that neither process was followed before the agreement was signed.
The dispute centres on the procurement of power for peak-hour supply. Vijayan said the government accepted VEH Global’s offer on September 22. He also pointed to the availability of wind power at Rs 3 to Rs 4 per unit at the time, arguing that the higher purchase rate could cause substantial losses to the state exchequer.
The opposition leader further questioned the eligibility of VEH Global to participate in the procurement process. He said the same government order that recorded the company’s offer also stated that VEH Global was not eligible to participate in the tender process. “Who was interested in awarding the contract to a company that was not eligible to participate in the tender?” he asked.
The allegations place the focus on how state utilities procure electricity during periods of peak demand, when supply costs and reliability pressures can rise. The regulatory approval process is intended to determine whether the proposed tariff and procurement arrangement comply with the applicable electricity law and protect consumers and public finances. The report does not include the regulatory commission’s response or an explanation from the government on the agreement.
Vijayan also linked the issue to an earlier controversy involving a GNA power purchase bid. He said Chief Minister V D Satheesan had previously responded to questions by stating that no agreement had been signed in that matter. According to Vijayan, the same explanation could not be used in the VEH Global case because he alleged that an agreement had already been executed.
He has demanded that the chief minister give a clear explanation to the public about the power purchase agreement, including the basis for selecting the supplier, the absence of a tender and the status of regulatory approval. The government’s response and any decision by the electricity regulatory commission will determine the next stage of the dispute.
