Lok Sabha Question No. 233 (STARRED), answered on 2023-03-16
Subject: Share of Government in PFC and REC
Ministry: POWER
Asked by: Sanjay Haribhau Jadhav

## GOVERNMENT OF INDIA MINISTRY OF POWER LOK SABHA STARRED QUESTION NO.233 ANSWERED ON 16.03.2023

## SHARE OF GOVERNMENT IN PFC AND REC

†*233. SHRI SANJAY JADHAV:

Will the Minister of POWER be pleased to state:

(a) the date on which the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) were established in the country;

(b) the objectives for which PFC and REC were established by the Government and the share  of  the  Government  in  the  said  corporations  and  the  details  of  the  production capacity of the said units;

(c) the  date  on  which  the  Government  started  financing  power  utility  equipment  in irrigation  projects  by  changing  the  objective  of  PFC  and  REC  and  the  details  thereof;

(d) the details and the number of States in the country that have received funding for irrigation  projects  from  PFC  and  REC  particularly  of  the  rural  areas  of  Maharashtra;

(e) the  manner  in  which  the  irrigation  projects  funded  by  PFC  and  REC  are  being implemented in the country;

(f) whether the tendering process for the irrigation projects funded by these two units is being carried out in a transparent manner and if so, the details thereof;

(g) the details of the agencies executing the work from the funds sanctioned by PFC and REC; and

(h) whether  the  identified/approved  agencies  are  working  properly  and  if  so,  the reaction of the Government thereto?

## A N S W E R

THE MINISTER OF POWER AND NEW & RENEWABLE ENERGY

(SHRI R.K. SINGH)

(a) to (h) : A Statement is laid on the Table of the House.

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STATEMENT

STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (h)  OF  STARRED QUESTION NO. 233 ANSWERED IN THE LOK SABHA ON 16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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- (a) : Power Finance Corporation (PFC) Limited was established on 16.07.1986 and REC Ltd. (formerly known as Rural Electrification Corporation Limited) was established on 25.07.1969.
- (b) : The objectives of the Government in establishing PFC Ltd. and REC Ltd. are furnished at Annexure-I and Annexure-II respectively. While the Government of India holds 55.99% stakes in PFC Ltd., the Government does not hold any stake in REC Ltd. However, PFC Ltd. holds 52.63% of stakes in the REC Ltd.

PFC Ltd. and REC Ltd. being NBFCs, information on production capacity is not applicable.

- (c) : The Government of India allowed PFC Ltd. and REC Ltd. to lend for specific parts Electromechanical [EM], Hydro-Mechanical components and associated civil works such  as  pumps,  motors,  pressure  mains,  etc.  of  irrigation  projects  by  changing  their Objects  Clause  in  the  Memorandum  of  Association  (MoA).  To  augment  and  cover  more power  utilization  equipment  in  irrigation  projects,  the  Object  Clause  of  PFC  Ltd.  was amended on 13.07.2020 and REC Ltd. was amended on 24.09.2021. The relevant Clauses of PFC Ltd. and REC Ltd. are enclosed at Annexure-III and Annexure-IV respectively.
- (d) : Two  States-Andhra  Pradesh  and  Telangana  have  received  funding  for  the specific portion of irrigation projects both from PFC Ltd. and REC Ltd. In addition to the above, REC Ltd. has sanctioned loans in the State of Kerala also. No irrigation projects has been funded by PFC Ltd. and REC Ltd. in Maharashtra State.
- (e) : The  irrigation  projects  funded  by  PFC  and  REC  are  being  implemented through package-wise contracts awarded through online e-Procurement Platform by the borrowers, as per their respective State Government norms.
- (f) : PFC Ltd. and REC Ltd. are Non-Banking Financial Companies (NBFC) engaged in  lending  operations  and  recoveries  of  their  loans  and  do  not  exercise  oversight  or manage  the  Tendering  processes,  which  is  carried  out  by  the  Project  companies (borrowers), in terms of their applicable State Government norms. However, PFC Ltd. and REC Ltd. are expected to exercise due diligence to ensure that costs are prudent.
- (g) : The details of the agencies executing the work from the funds sanctioned by PFC Ltd. and REC Ltd. are given at Annexure-V and Annexure-VI respectively.

(h) : As reported by PFC and REC, agencies are working and are executing the respective projects properly.

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ANNEXURE-I ANNEXURE REFERRED TO IN PART (b) OF THE STATEMENT LAID IN REPLY TO STARRED  QUESTION  NO.  233  ANSWERED  IN  THE  LOK  SABHA  ON  16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC *********** Main Objectives to establish PFC are given below: (i) To finance power projects, particularly thermal and hydro-electrical projects. (ii) To  finance  the  renovation  and  modernisation  of  power  plants  aimed  at improving the availability and performance of such plants. (iii) To finance system improvement and energy conservation schemes. (iv) To finance maintenance and repair of capital equipment including facilities  for  the  repair  of  such  equipment,  training  of  engineers  and  other personnel  employed in generation, transmission and distribution of power. (v)      To finance surveys and investigations of power projects. (vi) To finance studies, schemes, experiments and research activities associated with various aspects of technology in power development and supply. (vii) To finance promotion and development of other energy sources including alternate and renewable energy sources.

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## ANNEXURE-II

ANNEXURE REFERRED TO IN PART (b) OF THE STATEMENT LAID IN REPLY TO STARRED  QUESTION  NO.  233  ANSWERED  IN  THE  LOK  SABHA  ON  16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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## Main Objectives to establish REC are given below:

- I. To finance rural electrification schemes in the country;
- II. To subscribe to special  rural  electrification  bonds  that  may  be  issued  by the State Electricity Boards  on  conditions  to  be  stipulated  from  time  to time;
- III. To promote and finance rural electric cooperatives in the country;
- IV. To administer the amounts received from time to time from the Government of India; and
- V. Other sources such as grants for the purpose of financing rural electrification in the country.

Further, objects incidental to attainment of main object permits the works for lift irrigation from rivers and for irrigation for development of sugarcane,  tobacco,  tea-gardens,  other  crops  and  other  rural  uses,  including other works as per sub clause III(b)(3) of Memorandum of Association of REC.

In  addition  to  above  clause  which  was  existing  prior  to  year  2009, the  objects  clause  was  amended  in  year  2009  to  include  various  activities having linkage with power projects, including financing of enabling infrastructure  facilities  that  may  be  required  for  the  speedy  and  effective development of power sector.

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ANNEXURE REFERRED TO IN PART (c) OF THE STATEMENT LAID IN REPLY TO STARRED QUESTION NO. 233 ANSWERED IN THE LOK SABHA ON 16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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## Clauses for funding of Power Utilisation Equipment - PFC

PFC has been funding irrigation projects (Only Electrical, Electro-mechanical components  and  associated  civil  works  of  an  irrigation  project)  through  enabling provisions in the objects of MoA. The enabling provisions under which funding of irrigation projects are being done are as under:-

- Main Objects to be pursued by the company:

Clause 1: To finance power projects, in particular thermal and hydro-electronic projects

Clause 2: To Finance power transmission and distribution works.

Clause 11: To finance and to provide assistance for those activities having a forward and backward linkage, for the power projects, including but not limited to, such as  development  of  coal  and  other  mining  activities  for  use  as  a  fuel  in  power  project, development of other fuel supply arrangement for power sector, electrification  of  Railway  lines,  laying  of  Railway  lines,  roads,  bridges,  ports  and harbours & to meet such other enabling infrastructures facilities that may be required.

- Objects incidental or Ancillary to the attainment of the main Objects:

Clause  37:  Generally  to  do  all  such  other  things  as  may  be  deemed  incidental  or conducive to the attainment of the objects or any of them.

- The other Objects for which the company is established are:

Clause 3: To undertake, carry out, promote and sponsor any program for development of power supply for promoting the social and economic welfare of, or the uplift of the rural population including in particular the economically weaker sections and to incur any expenditure in respect thereof and to assist execution and promotion thereof either directly or through an independent agency or in any other manner.

The revised enabling provision presently applicable for funding irrigation projects (after MoA was amended in Oct, 2020 complying with Companies Act) is as given below :-

· 'To finance projects, activities or works including electrification works of creation, up-gradation, renovation, improvement, maintenance, repair, modernization, modification, replacement, augmentation, etc. of electrical and electromechanical systems, standalone or that are part of large projects e.g. Projects of Lift Irrigation, Sewage  treatment  plant, Smart  City, Electrification of railway line, etc.'

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ANNEXURE-IV

ANNEXURE REFERRED TO IN PART (c) OF THE STATEMENT LAID IN REPLY TO STARRED QUESTION NO. 233 ANSWERED IN THE LOK SABHA ON 16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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## Clauses for funding of Power Utilisation Equipment - REC

REC has been funding Power utilization equipment for irrigation purposes since incorporation of Company  in the year 1969. Further, REC  objects incidental  to  attainment  of  main  objects  {clause  III  (b)(3)}  inter-alia  permits the  works  for  lift  irrigation  from  rivers  etc.  which  was  existing  prior  to  year 2009. The  objects clause was  further amended  in  year 2009  to include various  activities  having  linkage  with  power  projects,  including  financing  of enabling  infrastructure  facilities  that  may  be  required  for  the  speedy  and effective development of power sector. The gist of relevant Clause of Memorandum of Association of REC is reproduced below:

- I. To finance rural electrification schemes in the country;
- II.  To  subscribe  to  special  rural  electrification  bonds  that  may  be  issued by the State Electricity Boards on conditions to be stipulated from time to time;
- III. To promote and finance rural electric cooperatives in the country;
- IV. To administer the amounts received from time to time from the Government of India; and
- V. Other sources such as grants for the purpose of financing rural electrification in the country.

Further,  the  objects  clause  of  Memorandum  of  Association  of  REC  was recently  amended  in  the  year  2021,  inter-alia  which  also  includes  power utilization equipment in irrigation projects, electrical and electromechanical/hydro systems, forming part of large projects including lift-irrigation projects, etc.

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ANNEXURE REFERRED TO IN PART (g) OF THE STATEMENT LAID IN REPLY TO STARRED QUESTION NO. 233 ANSWERED IN THE LOK SABHA ON 16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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The details of the agencies executing the work from the funds sanctioned by PFC Ltd.:-

1. Kaleshwaram Project: Implementing Agency (Kaleshwaram Irrigation Project Corporation Ltd.)

| Package                                                                                                                            | Name of the Contractor                             |
|------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|
| Package 6 (tunnel/canals from Sripada Yellampally Reserovir to Medaram Tank, Pump House and Associated works)                      | M/s. NAVAYUGA-PATEL-BHEL (Consortium)              |
| Package 8 (tunnel/canals from Medaram Tank to Midmainair reservoir, Pump House and Associated works )                              | M/s. MEIL-SEW-MAYTAS-BHEL (Consortium)             |
| Package 9 (tunnel/canals from Midmainair reservoir to Upper Manair Reservoir, Malkapet Reservoir, Pump House and Associated works) | M/s. IVRCL-BATPASCO-WPIL-MHI (JV)                  |
| Package 10 (tunnel/canals from Midmainair reservoir to Anantagiri Reservoir, Pump House and Associated works)                      | M/s. HCC-MEIL-BHEL (JV)                            |
| Package 11 (tunnel/canals from Anantagiri Reservoir to Sri Ranganayaka Sagar, Pump House and Associated works                      | M/s. SEW-MEIL-BHEL (JV)                            |
| Package 12 (tunnel/canals from Sri Ranganayaka Sagar to Sri Komaravelly Mallana Sagar Reservoir, Pump House and Associated works)  | M/s. MEIL-SEW-ABB-AAG (JV)                         |
| Package 14 (canal upto Konda Pochamma Reservoir, Pump House and associated works)                                                  | M/s. Megha Engineering Infrastructure Ltd          |
| Package 20 (tunnel/canals from SRSP Foreshore to Masani Tank, Pump House and Associated works)                                     | M/s. IVRCL-BATPASCOP-WPIL- MHI(JV)                 |
| Package 21 (tunnel/canals from Masani Tankto Kondem Cheruvu, Pump House and Associated works)                                      | M/s. NAVAYUGA-AAG-ABB(JV)                          |
| Package 22 (tunnel/canals from Kondem Cheruvu to Bhumapally Reservoir ,Pump House and Associated works)                            | M/s. SCL-INDU-KBL-WEG(JV)                          |
| Package 27 (tunnel/canals from Kondem Cheruvu to Bhumapally Reservoir ,Pump House and Associated works)                            | M/s. SUSHEE-ZVS-FLOWMORE(JV)                       |
| Package 28 (Canal System from Sriram Sagar to Hangarga Village Village)                                                            | M/s. MEIL-ZPS-PVSRSN- ITT(Consortium)              |
| Package 21A ( Pressurized Pipe System)                                                                                             | M/s. MEIL-HES (JV)                                 |
| Medigadda Barrage                                                                                                                  | M/s. L&T PES (JV)                                  |
| Medigadda Lift                                                                                                                     | M/s. MEIL NCC (JV)                                 |
| Annaram Barrage                                                                                                                    | M/s. AFCONS VIJETA PES                             |
| Annaram Lift                                                                                                                       | M/s. Megha Engineering Infrastructure Limited, HYD |
| Sundilla Barrage                                                                                                                   | M/s. NAVAYUGA GMW (JV)                             |
| Sundilla Lift                                                                                                                      | M/s. Megha Engineering Infrastructure Limited, HYD |

## 2. Palamuru Rangareddy Lift Irrigation Project: Implementing Agency (Kaleshwaram Irrigation Project Corporation Ltd.)

| Package                                                 | Name of the Contractor                 |
|---------------------------------------------------------|----------------------------------------|
| Package 1 Pump House at Narlapur and associated work    | M/s Navayuga Engineering Company Ltd., |
| Package 5 Pump House at Yedula and associated works     | M/s MEIL-BHEL (JV)                     |
| Package 8 Pump House at Vattem and associated works     | M/s MEIL-BHEL (JV)                     |
| Package 16 Pump House at Udandapur and associated works | M/s Navayuga - RVR (JV)                |
| Substation and Transmission lines                       | TSTRANSCO                              |

## 3. Rayalseema Drought Mitigation Project:

Implementing Agency: Andhra Pradesh Rayalseema Drought Mitigation Projects Development Corporation Limited

| Sl. No.   | Project work                                                                                                                                  | Name of the Contractor                                                   |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
| 1.        | Rayalaseema Lift Scheme to draw and utilize 3 TMC per day from Sangameswaram to SRMC at Km 4 from Pothireddypadu Head Regulator               | M/s SPML- NCC- MEIL (JV)                                                 |
| 2.        | Formation of Rajoli Reservoir across Kundu River on upstream side of existing Rajoli Anicut for a total storage capacity of 2.95 TMC of water | M/s MRKR- RITHWIK (JV), HYD                                              |
| 3.        | Construction of Joladarasi Reservoir with 0.80 TMC capacity across Kundu River at Joladarasi (V), Koilakuntla (M), Kurnool Dist.              | M/s MRKR- RITHWIK (JV), HYD                                              |
| 4.        | Improvements of GNSS FFC : Widening of GNSS FFC from Owk Reservoir to Gandikota Reservoir                                                     | M/s MRKR Constructions & Industries Pvt Ltd, Hyderabad                   |
| 5.        | Additional Gandikota Tunnel to carry 10,000 cusecs for feeding to Gandikota reservoir.                                                        | M/s MRKR Constructions & Industries Pvt Ltd, Hyderabad                   |
| 6.        | Errabali Lift Irrigation Scheme to supplement UCIL affected villages including Formation Reservoir at Giddangivaripalli                       | M/s MRKR Constructions & Industries Pvt Ltd, Hyderabad                   |
| 7.        | Kundu Lift Irrigation scheme                                                                                                                  | M/s Megha Engineering Infrastructures Ltd, Hyderabad                     |
| 8.        | Upgradation of Gandikota CBR Lifts & Gandikota Paidipalem Lift Scheme                                                                         | M/s Megha Engineering Infrastructures Ltd, Hyderabad                     |
| 9. 10.    | Development of Micro Irrigation under PBC, CBR Right Canal and GLI Systems                                                                    | M/s PLR Projects Private limited, & Navayuga Engineering Company Limited |
|           | GNSS to HNSS Lift Irrigation Scheme                                                                                                           | (JV), Hyderabad M/s Megha Engineering                                    |
| 11.       | Package-I : Improvements of HNSS Main canal from -4.806 Km to 88.00 Km Package-2 : Improvements of HNSS Main canal                            | Infrastructures Ltd, Hyderabad M/s DSR-VPR Joint Venture                 |
| 12.       | from 88.00 Km to 216.3 Km                                                                                                                     |                                                                          |
| 13.       | Enhancing the carrying capacity of Punganuru Branch Canal under HNSS P-II to feed upto Kuppam including irrigation network                    | M/s NCCL                                                                 |
| 14.       | Formation of three balancing reservoirs near Mudivedu, Netiguttapalli and Avulapalli                                                          | M/s NECL-RRCIIPL (Joint Venture), Hyderabad,                             |
| 15.       | Widening of Somasila Kandaleru Flood Flow Canal (SKFF)                                                                                        | M/s VPR-GDR-MRGR (JV)                                                    |
| 16.       | Improvements to GKN Canal from Somasila to feed Rallapadu Reservoir                                                                           | VPR-GDR-MRGR (JV) Hyd Pvt Ltd                                            |

ANNEXURE REFERRED TO IN PART (g) OF THE STATEMENT LAID IN REPLY TO STARRED QUESTION NO. 233 ANSWERED IN THE LOK SABHA ON 16.03.2023 REGARDING SHARE OF GOVERNMENT IN PFC AND REC

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The details of the agencies executing the work from the funds sanctioned by REC Ltd.:-

| Sl. No.        | Project Name                                                               | Agencies executing the works                                                                                                                                                                     |
|----------------|----------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Andhra Pradesh | Andhra Pradesh                                                             | Andhra Pradesh                                                                                                                                                                                   |
| 1.             | Chintalapudi Lift irrigation scheme                                        | Package - 1: M/s MEIL - Gayatri - ZVS - ITT - Consortium Ltd. Package - 2: M/s Gayatri Projects Ltd. Package - 3: M/s MEIL Package - 4: M/s NEC - RVR (JV), Hyderabad                            |
| 2.             | Kondaveetivagu Lift scheme - Flood relief Scheme                           | M/s. MEIL, Hyderabad                                                                                                                                                                             |
| 3.             | Purushottapatnam Lift irrigation scheme                                    | M/s. MEIL, Hyderabad                                                                                                                                                                             |
| 4.             | Interlinking of Godavari-Penna Rivers Phase 1 Project                      | M/s MEIL & RVR                                                                                                                                                                                   |
| Telangana      | Telangana                                                                  | Telangana                                                                                                                                                                                        |
| 1.             | Indiramma Flood Flow Canal (IFFC)                                          | M/s Navayuga Engineering Company Limited; M/s MEIL-RATNA-KBL (JV), M/s Megha Engineering & Infrastructures Ltd.; M/s Integrated Engineering;                                                     |
| 2.             | Sita Rama Lift Irrigation Project                                          | TS TRANSCO M/s Megha Engineering & Infrastructures Ltd; M/s NCC-PRATHIMA-AMRUTHA(JV); M/s SDC-KAVERI TS TRANSCO                                                                                  |
| 3.             | PV Narasimha Rao - Kanthanapally Sujala Sravanthi scheme at Thupakulagudem | M/s SEW-RITHWIK (JV), Hyderabad                                                                                                                                                                  |
| 4.             | J. Chokkarao - Devadula Lift Irrigation project                            | M/s. Coastal Projects Pvt. Ltd., Patel                                                                                                                                                           |
| 4.             | Already executed E&M works under Devadula & Other works                    | Engineering Ltd., Jyoti Ltd., CBE Consortium; M/s. HCC SEW-MEIL-AAG(JV); M/s.NCC-MEIL-ZVS-SIGMA Consortium; M/s.MEIL-PRASD-KBL (JV); M/s. Megha Engineering & Infrastructures Limited TS TRANSCO |

| 5.     | E&M, H&M and associated Civil works for lifting capacity enhancement of existing system by 1.1 TMC (Thousand Million Cubic Feet) water per day from Sripada Yellampally Project (SYP) to Mid Mannair Reservoir under Link 2   | M/s MEIL, Hyderabad TS TRANSCO                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
| 6.     | E&M, H&M and associated Civil worksFor lifting of additional 1 TMC water per day from Medigadda Barrage on Godavari River to Reservoir at Sripada Yellampally Project (SYP)) under Link-1                                     | M/s MEIL-NCC (JV); M/s Megha Engineering & Infrastructures Ltd                                     |
| 7.     | E&M, H&M and associated Civil works For lifting of additional 1 TMC water per day from Mid Manair Reservoir to Sri Komaravelli Mallana Sagar Reservoir under Link-4                                                           | M/s Pratima-NCC-NECL (JV); M/s Megha Engineering & Infrastructures Ltd.; M/s KNR-NAVAYUGA-NCC (JV) |
| Kerala | Kerala                                                                                                                                                                                                                        | Kerala                                                                                             |
| 1.     | Electrical, Electro-Mechanical, Hydro system & Pumping station works under 12 no. irrigation projects in various districts of Kerala                                                                                          | Kerala Irrigation Infrastructure Development Corporation Ltd (KIIDC)                               |
| 2.     | Electrical, Electro-mechanical, Pumping station and Hydro systems works under 38 no. water pumping station/ water supply projects in various districts of Kerala                                                              | Kerala Water Authority (KWA)                                                                       |

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