Monthly Archives: March 2013

How a Rajasthan village lost to Robert Vadra

French solar firm leaped 180-km from original location to buy land from Vadra firms in Gajner

Umrao Khan is a driver who retired from Rajasthan’s state-run roadways. More than ten years ago, he bought 50 bighas of land in Sujasar village, about 20 kilometres from Pokharan, best known for being India’s nuclear test site, at a price of Rs 3,000 per bigha. Across a dirt track lay a vast stretch, the villagers put it at roughly 1600-1700 bighas, where the proposed Rajasthan Solar Processing Zone was to come up.

But four years after the land bank was developed by Jodhpur-based Ashapurna Buildcon, the solar energy zone RSPZ remains a rusting board standing in the middle of the desert.

That’s because Gajner, another non-descript village about 180 kilometres north-east on the highway to Bikaner, weaned away two solar power generation projects that RPSZ had planned to kickstart with.

Originally famous for a lake-side palace-turned-luxury hotel, Gajner is fast emerging as one of the largest renewable energy hubs thanks to a special interest shown in the region by Congress President Sonia Gandhi’s son-in-law Robert Vadra, who has built a formidable land bank here through Mahesh Nagar, brother of a Faridabad-based Congress politician.

Here is the story of how an Aam village lost its solar plants and the developments these would have brought to a VIP village.

A portion of the RPSZ boundary marked by white stone pillars is still visible. Adjoining Khan’s plot is a piece of land which once belonged to his cousin but is now owned by the Jodhpur-based developer.

“Is jaga ka mera chowkidaari hai (I keep a watch on this land),” Khan said.

At the top right corner of this plot, a few Photovoltaic (PV) plates are mounted at an angle of 60 degrees on a metal frame about the size of a mini-theatre. There is an empty room painted in white-and-blue. To an onlooker it seems as if some solar-related activity is on, till Khan throws in the spoiler.

“Nothing is produced in there. Even the power for the single bulb is drawn from my house,” he chuckles.

RSPZ was supposed to be a full-fledged solar park with a total capacity of 100 megawatt (mw). Among the companies that lined up to set up shop were Fonrochie Energie, a five-year-old French firm focusing on renewable energy, started by a young solar entrepreneur Yann Maus. Fonroche’s India plans were to commence with two plants with a combined capacity of 20 MW in the land Khan guards.

Wooing Fonroche

Enter Vadra. Though Rajasthan government had put up a 220 KV grid substation on National highway-15 that cuts through Gajner, making his holdings close to this station ideal for solar plants, none of the project developers who won the competitive bidding under the government programmes chose Gajner.

Vadra lacked a credible anchor who could move in first and spark the development in several hundred hectares of desert he had bought.

Fonroche, with its international credentials and enviable track record in the solar energy, fitted the bill perfectly.   While founder Maus still holds about 52%, private equity fund Eurazeo holds 39% in the company.  Fonroche has entered into a equal joint venture with Mumbai-based PR Clean Energy for its India operations. The joint venture called PR Fonroche plans to invest up to Rs 800 crore this year.

Business Standard investigations reveal that Fonroche bought Vadra’s land in May 2012, four months after it had finalized plans in Sujasar. Though it had entered into power purchase agreements citing project location as Sujasar and Galar, another hamlet that borders Sujasar, Fonroche changed  its mind and picked the land Vadra had to offer. A little over six months later it announced the launch of its first plant from Gajner.

Global companies such as Fonroche, and Indian corporate groups such as Reliance,Tatas. Mahindra, L&T, Welspun are rushing to catch the Indian sun largely due to the impetus provided by a central government program called Jawaharlal Nehru National Solar Mission or JNNSM, which under the brand ‘Solar India’ aims to establish India as a global leader in solar energy, “by creating the policy conditions for its diffusion across the country as quickly as possible.”

“The 80% accelerated depreciation available to project developers in the first year itself is a big draw for investors,” said an official of a power company.

How the mission works

The Mission has set a target of 20,000 MW to be achieved in three phases (first phase up to 2012-13, second phase from 2013 to 2017 and the third phase from 2017 to 2022) for various components, including grid connected solar power. JNNSM has proposed a mechanism of “bundling” relatively expensive solar power with power from the unallocated quota of the Government of India (Ministry of Power) generated at National Thermal Power Corporation’s coal based stations, which is relatively cheaper.

This “bundled power” would be sold to the distribution companies. JNNSM also provides for NTPC’s Vidyut Vyapar Nigam Ltd or NVVN to be the designated nodal agency for procuring solar power by entering into Power Purchase Agreements (PPA) with Solar Power Generation Project Developers. “For each MW of installed capacity of solar power for which a PPA is signed by NVVN, the Ministry of Power shall allocate to NVVN an equivalent amount of MW capacity from the unallocated quota of NTPC coal-based stations and NVVN will supply this “bundled” power to the distribution utilities,” according to the policy.

Rajasthan’s Jodhpur-Jaisalmer- Bikaner belt has the highest solar irradiation in the country @6.4-6.6 kilowatthour per square metre. This area, which also has 12 hours of sunlight for over 330 days every year, is best suited to put solar plants.
That’s why in the first batch of phase I, 20 of 28 solar project developers chose locations in Rajasthan. In December 2011, the government awarded the bids under phase I batch II of the mission. Some 24 developers emerged winners. Among them were Fonroche Raajhans Energy and Fonroche Saaras Energy.

From Sujasar to Gajner

In January 2012, both companies entered into a power purchase agreements with NVVN. According to the list of project developers put up by NVVN, reviewed by Business Standard, Fonroche Raajhans was to put up a 5 MW plant in “Gram Galar, near Ramdevra, Tehsil Pokharan.” Similarly, the location of 15MW plant for which Fonroche Saaras signed the PPA was mentioned as “gram Sujasar, near Ramdevra, Tehsil Pokhran.” This was because at this point both firms had got into a Memorandum of Understanding or MOU with the developer of RSPZ which spread across these two villages. “We had an MOU (memorandum of understanding) with Fonroche and a couple of others. But they did not keep their commitments,” said Arjun Singh of Jodhpur-based Ashapurna Buildcon.

Ghewar Singh, Sujasar-based landlord and farmer said the ‘companies’ have been buying land in the region since 2009. “They have bought in ‘thukkadas’ (small pieces). Kisi se das bigha, Kisi se sou.(ten bighas from some, hundred from some) The rates have also varied from Rs 5,000 to Rs 25,000 for a bigha.” In Rajasthan, 3.965 bighas make a hectare.

Ghewar’s brother, Badam Singh, an elderly man with a white pagdi and glasses, said nobody would sell for less than Rs 50,000 per bigha today, though rates have touched Rs 10 lakh near the highway. “The actual setting up of plants may not make a big difference if there are no incentives for the local communities such as jobs or free electricity,” said Singh.The older brother sits with regional newspapers strewn around him and identifies Fonroche as the company that bought land from Vadra. Even some of the younger Sujasar residents connect Vadra with Fonroche, which twists their tongue. But none of the villagers are aware that Vadra’s gain was their loss.

Sale deeds registered in Kolayat, the registry under which Gajner falls, reviewed by Business Standard, showed that on May 23, 2012, Vadra’s front man Nagar, executed four different deals with the Fonroche twins. Through these deals, the two firms bought 62.44 hectares of Gajner land for Rs 4.24 crore.

While the developer said Fonroche backtracked, the company said the requisite infrastructure was not in place in Sujasar. “At the time of entering in to the PPA we had a basic MOU with the developer in Sujasar to discuss the possibility depending on their ability to provide the necessary infrastructure,” said Pratap Raju, joint managing director of PR Fonroche. “We had an EPC tie-up with Mahindras. Since the infrastructure was not ready in time we started looking for land between January and April and zeroed in on the land in Gajner.” An email sent to Vadra’s personal assistant Manoj Arora seeking comments did not elicit any response.

Raju said he did not know the seller was a company related to Vadra when the deals were done. “We got to know only when the newspaper reports started coming in October that we might have bought from him.” He said it would cost about Rs 30 lakh per km to build a 33kv transmission line as specified by the government. “In Rajasthan land is everywhere. Price of the land comes to only three% of the total project cost. Assuming we put up the project some 15-20 km from the power station, evacuation costs alone would have been around Rs 6 crore,” Raju said, adding that price of land should be seen in this context.

Minimum evacuation costs

Helped by Mahindra Solar, its EPC partner, Fonroche has begun power generation in its Gajner based plant. Located just stone’s throw from the 220kv grid sub-station, evacuation costs are minimum. Three blue-uniformed security guards, who sit guarding the Fonroche plant off the highway, refer to it as the “Mahindra plant.”

Across the road, sits a petty shop catering to the guards and other labourers of the plant. Nandkumar Naik, who set shop around the time the plant started, points to the huge fenced parcel of land behind him. “That is about 70 acres. Reliance has bought. They are trying to buy more. Once it is complete, they will start putting up the plant,” he said. The guards corroborate the imminent Reliance entry in Gajner.

Along the trail of 33Kv towers, one B M Developers is putting up a 5Mw project about ten km from the Gajner sub-station. Workers are still putting up the towers. A few Tamil-speaking engineers are completing the electrical work. One of them says the land prices have shot up from Rs 1 lakh per acre when their client bought to Rs 8 lakh per acre now. Apart from these, not much work could be seen in Gajner itself though many developers are said to have bought from Vadra and others.

In December 2011, Fonroche Rajhans and Fonroche Saaras win Letter of Intents under JNNSM phase-1 Batch-II
Fonroche enter into an MOU with Jodhpur-based developer which had land bank in Sujasar/Galar
In Jan 2012, Fonroche named Sujasar/Galar, near Pokharan as plant location while entering into a power purchase agreement with NTPC Vidyut Vyapar Nigam, a state-owned power trading firm
In May 2012, Fonroche shifts plants 180 km north- east to Gajner after buying land from Vadra’s firms
In December 2012, Fonroche plant became operational in Gajner

About 15 km away, near Kolayat, is a substation. A couple of projects are coming up a few kilometers from here on the road to Deh. Charan Kumar Chowdry is putting up a project for Rays Power Experts. Chowdry, who has a 45-kilomtre commute from Bikaner, says engineers like him are in demand. He was a cluster manager with Reliance Communications for over a decade before moving into the solar boom.

The company he works for is putting up a park model, wherein it is allowing “small investors” to buy capacities of as low as 250KV. (1000 KV make a Megawatt). “Maximum size available here is 10 MW, which could cost about  Rs 70 crore,” said Chowdry.  He gives different numbers for the transmission towers. According to him, a tower costs about Rs 1-2 lakh and a tower is needed every 200 metres. That puts evacuation costs at a fraction of what Fonroche estimates.

Yet to see a plant

Though Sujasar residents do not realize this, Sujasar appears to be among the few places in the original list that is yet to see a plant come up. Nearby solar hubs such as Dhursar, on the Jodhpur- Pokharan road, and Askandra have received big investments from companies such as Reliance Power and Lanco Infratech.

“About 150 people worked in shifts when the construction was on. Now it’s down to about 60-65,” said Durjar Singh, who works for G4S Security Services which covers the Lanco plant, Singh said spreads over some 4,000 acres.  The local people estimate Lanco, with approvals for 235mw, has completed 35mw so far.

About 90 kms from Pokhran, in Phalodi taluk of Jodhpur district, several other projects have sprung up. A 25 km stretch between Bap on the National Highway to Bikaner and Kanasar is dotted by Welspun, Punj Lloyd and Green infra solutions projects, most of them commissioned. A Haryana-based developer Conflux infratech has even put up a 1 MW plant just off the highway. “It’s about 21 bighas,” the young security guard said.

Once the Photovoltaic plates are set up, not much manpower is required to run a solar plant, apart from security and maintenance staff. “Dusting of the plates by sand is a typical problem in Rajasthan. A 20mw plant would require about 30 people for maintenance,” says a Bikaner-based solar entrepreneur.

The Fonroche effect

Meanwhile in Sujasar, after Fonroche, LEPL projects, a Vijayawada-based developer also pulled out. Ashapurna’s Arjun Singh said he has roped in Andhra-based Srisakthi Alternative Energy to revive the park in Sujasar-galar, which Rahamatullah, the teenage driver of a Phat-Phat argues, is in Dudhia and not in Sujasar.

“We have already received commitments for 70 mw from some reputed corporate names. We are in the process of tying up the rest. Some government approvals for the park are also pending,” said Arjun Singh of Ashapurna Buildcon.

The villagers say it’s the Tatas who are in talks now. “They want the developer to build the approach road before finalizing the deal,” one of them said.

“I said I want to buy here only as my father and relatives had land holdings here,” Umrao Khan of Sujasar said. Khan and his sons have turned their land into an island of green amid the vast stretches of wasteland with nothing but tropical shrubs. Khan won’t sell though he says he has received offers of up to Rs 2.5 crore. “I make up to Rs 5-7 lakh out of this land, every year,” he said.

Fed up with calls about the project, Khan says he tells people that the armed forces have taken over the place and that it a shooting range now. “Dalal bahut ho gaye. Pareshan karte hain.” Who are these Dalals? How can they be reached? “Everyone is a Dalal these days. Even farmers, anyone. Bas itna hi bolna hai. Zameen hai. Dila sakta hoon. Ban gaye Dalal  . (All you have to say is you can get land and you are a broker).”

Khan wouldn’t tell if he was referring to the biggest of them all. But a smirk spills out of his beard leaving no room for doubt.