CPSU awards smart meter tender to a Chinese firm; Jammu discom orders probe

The Jammu Power Distribution Corporation has ordered an enquiry into the project, citing a threat to national security

In the midst of India-China border tensions and a ban on imports from the neighbouring country, a sensitive project of smart meters and power communication is being constructed by a Chinese government-owned company in the strategic region of Jammu & Kashmir. 

The Jammu Power Distribution Corporation (JPDCL) has ordered an enquiry into the project, citing a threat to national security. 

The project was awarded by a central government agency, REC Power Distribution Corporation (RECPDCL), under the Prime Minister Development Package (PMDP), for the newly declared Union Territories of Jammu & Kashmir. In a letter dated July 9, JPDCL wrote to RECPDCL for scrutiny of the project.

Simultaneously, the other bidders for the tender, including infrastructure major Larsen & Toubro (L&T), have alleged that the contract given to the Chinese company was off the books because the company did not participate in the bidding. It also raised the issue of national security.

“In this present volatile scenario, entrusting sensitive work to a Chinese organisation entails security risk and is counter-productive,” said L&T in its letter (dated July 2) to the power distribution departments of Jammu & Kashmir and the secretariat of the Union Territory. 

 

Business Standard reviewed the letter.

JPDCL has asked RECPDCL to re-evaluate the contract, citing similar concerns.  “In the backdrop of Chinese intimidations on the borders of our country and orders issued by the Government of India … regarding ‘ban on Chinese power equipment’, it becomes necessary to take appropriate action through deliberations, in the matter,” said the letter of the chief engineer, JPDCL. 

Queries emailed to JPDCL did not receive any response. In a written response to the paper, RECPDCL said: “We are not aware of any such enquiry by JPDCL.” 

It said JPDCL had not expressed any concern related to national security to it. 
 

“As regards the security of the system is concerned, all legal requirements in this regard are being complied with.”

The project, costing Rs 125 crore, was awarded by RECPDCL, an arm of Rural Electrification Corporation (REC), under the Ministry of Power, in September last year. It was e-inaugurated by R K Singh, Union Minister of State for Power, New and Renewable Energy, in February this year.
 

The project entails setting up 100,000 smart meters each in Jammu and Srinagar cities, along with allied communication and back-end infrastructure.

The main EPC (engineering, procurement, construction) contractor is Techno Electric & Engineering Company, and a sub-contract of meter supply is with Allied Engineering Works (AEW). Dongfang Electronics (DFE), the Chinese company, is doing radio frequency (RF) communication, which is a remote communication system for power equipment such as smart meters.

Documents accessed by Business Standard showed DFE did not participate in the tender. Techno Electric had the winning bid, with L&T as meter supplier and British company CyanConnode, with its arm in Gurugram, RF communication supplier. 

Both the companies have alleged “breach of contract” and made several complaints to RECPDCL. In its latest letter to the Jammu & Kashmir authorities, L&T alleged DFE and AEW lacked tender qualifications and the change in sub-contractor was for “making high profits” by Techno Electric. The company has also alleged irregularities in contract management by the government authorities. 

“By choosing Dongfang, a Chinese-made RF communication product, Techno Electric has compromised the cybersecurity data, by allowing access and usage of details of electricity consumers of key cities of Jammu & Kashmir by a Chinese company,” said L&T’s letter. The spokesperson for L&T did not respond to the emailed queries, seeking comment on the matter. Techno Electric and CyanConnode could not be reached.

 

In earlier communications to RECPDCL since December, CyanConnode had asked the agency to look into the project award and the irregularities. It said Techno Electric submitted the bid with L&T and CyanConnode and hence the sub-contractor could not be changed after the project was awarded. The project is funded under the Rs 80,000-crore Prime Minister development package for Jammu & Kashmir, announced in 2015.