1. Does the project IRR with CDM revenue increases only by 0.49% from project activity without CDM revenue?

2. How the project activity proves that the CDM revenue alleviates the barrier as the IRR with CDM revenue is much less than the benchmark?

	DOE to write to the party who prepared the DPR/FR which is submitted to the banks and other agencies and the same is verified against the one submitted to the DOE by PP/Consultant. 

	DOE must not entertain this project any more if found the DPR/FR is tamprered with at any point in time. PP can not give different DPR’s and FR’s. They must submit only the one given to Banks and other agencies while obtaining loans and decision making time. 


	DOE to ensure that the PDD values are consistent and ensure that the CDM project is a genuine project

	DoE to check the Detailed Project Report and Feasibility Report which is submitted to the other agencies and Banks by Project owner and ensure that the values match with the DPR/FR  submitted to DoE also. 


	Careful study must be done so that the DPR/FR is not in different versions made and submitted with different purposes to different agencies, which is totally unacceptable, illegal and unethical. 

	Project owner should show some undertaking letter from bank manager to DoE stating that both DPR’s are same. These kinds of letters should not be accepted and entertained by DoE at face value, but must be checked independently. While collecting the DPR/FR from banks and other agencies, all DPR/FR pages should be counter signed by Banks and other agencies so that the real DPR/FR given to other parties by the PP/Consultant is same as the one submitted to DOE. 


	DPR/FR values must be probed fully. DOE must take a written undertaking from the PP/Consultant about the list of parties to whom this DPR/FR is submitted and for what purposes. Then DOE should cross check with all the parties and confirm that the same DPR/FR is submitted to all the parties correctly without any changes. DOE must not accept any reports and undertakings from PP/Consultant. DOE must make independent evaluation and use totally different parties without informing the PP or Consultant to cross check the facts. 


	Has the PP considered the CDM revenues while envisaging the project? Without CDM the project was not viable, is it right? This project is having a debt component? Then how bankers or lenders gave the loan? Have the bankers or lenders considered the CDM revenues while agreeing to give loan to this projects? If not this project should be rejected right away by DOE by terminating the contract forthwith. If yes, where is the proof? What is the date of the evidence document from bank? Is this document printed now a days or earlier. DOE to independently check the same. If the document is  available from Bank it must be checked from all angles so that it is genuine and not forged and date changed by putting back dated. This is normally done, DOE to be aware of this please. Please check the communication the PP had during that time with banks, emails and postal receipts and the weights and dates mentioned on the receipts. Do not believe in courier bills and receipts since these can be cooked up easily. Insist on government owned postal service receipts only. If the project is fully equity project then on what basis the PP has invested full equity in to the project while considering the CDM revenue? DOE to check the same in detail and bring out the facts. Is there any past record of this PP to invest or not to invest at returns what he is talking about in this project? Proper evidences must be reviewed and digged out by the DOE and take decision on the project based on established facts. Do not ask documents from PP, DOE to collect the same from different sources to do independent evaluation. 

	 How is the base line defined in this project? Is Base line hypothetically defined with no proper evidences and proper justification? In such case, DOE cannot take the base line as suggested by the PDD.  Please check that there are real emission reductions beyond the real and factual base line. It may so happen that this project qualifies for no CER’s. DOE cannot assume values and things as giving by this PP. Whatever values are considered throughout the project in all documents including the real DPR (not the one prepared for CDM, the one given to the banks and others), they must be validated, verified and double checked. Do not ask PP for DPR. Ask the parties who have been given DPR by the PP. Get directly from the bank and others by each page of the DPR and Feasibility report signed. Such document can be considered as a real DPR or FR. UNFCCC CDM process cannot be degraded by fabricating and misinterpreting the project base line and additionality.  



	From DOE side which auditor has done marketing and business development for acquiring this business of validating this project? With whom he or she was co-ordinating at PP or CER buyer? The same person who has done the marketing and business development to acquire the business do validation or participate in any manner what so ever in the validation process? One cannot do like that. It is against the accreditation rules and norms followed since ages. DOE should send auditors from different offices or countries to do this validation audit. DOE must take care of impartiality and accreditation rules. Due to the targets set by the DOE managements auditors are doing marketing and meeting clients and giving promises that the project will be taken care. Is it acceptable and fair? This must be stopped. No auditor should do marketing. Only non-auditing staff should do marketing. DOE to ensure the same please. 


	If applicable only: Is these machines, equipment was a part of any bundle of CDM activity envisaged and developed earlier. DOE to check the same through independent sources also. Once some bundles are non-additional and getting negative validation from a DOE, PP is rolling out the same project as an individual project which is not a CDM project at all. DOE to verify the same from independent sources and also take undertaking in the form of an affidavit from the PP’s that any misrepresentation or false statement with respect this would attract strict legal action from UNFCCC and DOE. Furthermore the registered project must be de-registered in case of any future findings contradicting the submissions made by the project owner.  



	DOE to be more careful so that this is a genuine CDM project. What is the exact project cost? The project cost is covering what? Each value considered must be validated with proof. The machinery is second hand purchased or fresh and new from an OEM? In either case DOE to check all the quotations, proposals, purchase orders, invoices, way bills, transport bills, proof of payments like bank statements. DOE to check with banks by way of written confirmation the amount transacted, to whom the money is paid, when the money is paid, is the party paid is the correct party as shown in the purchase orders. It may so happen that the values, party names, dates are fabricated and misrepresented in this project. DOE should terminate their contract for this project immediately. This is the only way out to protect the value of CDM process. If the PP is purchasing second hand or second quality equipment and inflating the purchase order values and invoices, this must be probed thoroughly and real values to taken for additionality calculation. Then I’m sure the additionality is not there at all in such a situation.

	Is the project equipment purchased second hand equipment or sourced from cheap foreign sources? If yes, the issue must be probed by DOE since invoices will invariably be inflated and forged. Total project costs mentioned by PP will not be the same as originals. Hence no additionality. These facts must be probed in full by DOE by checking all documents and money transactions along with bank statements and certified accounts by a legally acceptable financial analyst. 

•	Why this location has been chosen for this project?
•	Will this project have impact on temperature in surrounding area?
•	How many skilled/unskilled people from surrounding area will be employed at this project during commissioning and operation? 
•	List of stakeholders and minutes of stakeholder meeting is not attached with PDD.
•	How PP is sharing 50% of CDM revenue profit with Government of Gujarat?

From
Mahesh Pandya
Environmental Engineer
Paryavaran mitra
502, Raj Avenue, Bhaikakanagar road
Thaltej, Ahmedabad – 380059 India
Telefax - 079-26851321/1801

1)	DOE to ensure that the PDD values are consistent and ensure that the CDM project is a genuine project.
2)	DoE to check the Detailed Project Report and Feasibility Report which is submitted to the other agencies and Banks by Project owner and ensure that the values match with the DPR/FR  submitted to DoE also. 
3)	Careful study must be done so that the DPR/FR is not in different versions made and submitted with different purposes to different agencies, which is totally unacceptable, illegal and unethical. 
4)	Project owner should show some undertaking letter from bank manager to DoE stating that both DPR’s are same. These kinds of letters should not be accepted and entertained by DoE at face value, but must be checked independently. While collecting the DPR/FR from banks and other agencies, all DPR/FR pages should be counter signed by Banks and other agencies so that the real DPR/FR given to other parties by the PP/Consultant is same as the one submitted to DOE. 
5)	DPR/FR values must be probed fully. DOE must take a written undertaking from the PP/Consultant about the list of parties to whom this DPR/FR is submitted and for what purposes. Then DOE should cross check with all the parties and confirm that the same DPR/FR is submitted to all the parties correctly without any changes. DOE must not accept any reports and undertakings from PP/Consultant. DOE must make independent evaluation and use totally different parties without informing the PP or Consultant to cross check the facts. 
6)	DOE to write to the party who prepared the DPR/FR which is submitted to the banks and other agencies and the same is verified against the one submitted to the DOE by PP/Consultant. 
7)	DOE must not entertain this project any more if found the DPR/FR is tamprered with at any point in time. PP can not give different DPR’s and FR’s. They must submit only the one given to Banks and other agencies while obtaining loans and decision making time. 

8)	Has the PP considered the CDM revenues while envisaging the project? Without CDM the project was not viable, is it right? This project is having a debt component? Then how bankers or lenders gave the loan? Have the bankers or lenders considered the CDM revenues while agreeing to give loan to this projects? If not this project should be rejected right away by DOE by terminating the contract forthwith. If yes, where is the proof? What is the date of the evidence document from bank? Is this document printed now a days or earlier. DOE to independently check the same. If the document is  available from Bank it must be checked from all angles so that it is genuine and not forged and date changed by putting back dated. This is normally done, DOE to be aware of this please. Please check the communication the PP had during that time with banks, emails and postal receipts and the weights and dates mentioned on the receipts. Do not believe in courier bills and receipts since these can be cooked up easily. Insist on government owned postal service receipts only. If the project is fully equity project then on what basis the PP has invested full equity in to the project while considering the CDM revenue? DOE to check the same in detail and bring out the facts. Is there any past record of this PP to invest or not to invest at returns what he is talking about in this project? Proper evidences must be reviewed and digged out by the DOE and take decision on the project based on established facts. Do not ask documents from PP, DOE to collect the same from different sources to do independent evaluation. 

9)	Is the project equipment purchased second hand equipment or sourced from cheap foreign sources? If yes, the issue must be probed by DOE since invoices will invariably be inflated and forged. Total project costs mentioned by PP will not be the same as originals. Hence no additionality. These facts must be probed in full by DOE by checking all documents and money transactions along with bank statements and certified accounts by a legally acceptable financial analyst. 

10)	From DOE side which auditor has done marketing and business development for acquiring this business of validating this project? With whom he or she was co-ordinating at PP or CER buyer? The same person who has done the marketing and business development to acquire the business do validation or participate in any manner what so ever in the validation process? One cannot do like that. It is against the accreditation rules and norms followed since ages. DOE should send auditors from different offices or countries to do this validation audit. DOE must take care of impartiality and accreditation rules. Due to the targets set by the DOE managements auditors are doing marketing and meeting clients and giving promises that the project will be taken care. Is it acceptable and fair? This must be stopped. No auditor should do marketing. Only non-auditing staff should do marketing. DOE to ensure the same please. 


11)	If applicable only: Is these machines, equipment was a part of any bundle of CDM activity envisaged and developed earlier. DOE to check the same through independent sources also. Once some bundles are non-additional and getting negative validation from a DOE, PP is rolling out the same project as an individual project which is not a CDM project at all. DOE to verify the same from independent sources and also take undertaking in the form of an affidavit from the PP’s that any misrepresentation or false statement with respect this would attract strict legal action from UNFCCC and DOE. Furthermore the registered project must be de-registered in case of any future findings contradicting the submissions made by the project owner.  

12)	DOE to be more careful so that this is a genuine CDM project. What is the exact project cost? The project cost is covering what? Each value considered must be validated with proof. The machinery is second hand purchased or fresh and new from an OEM? In either case DOE to check all the quotations, proposals, purchase orders, invoices, way bills, transport bills, proof of payments like bank statements. DOE to check with banks by way of written confirmation the amount transacted, to whom the money is paid, when the money is paid, is the party paid is the correct party as shown in the purchase orders. It may so happen that the values, party names, dates are fabricated and misrepresented in this project. DOE should terminate their contract for this project immediately. This is the only way out to protect the value of CDM process. If the PP is purchasing second hand or second quality equipment and inflating the purchase order values and invoices, this must be probed thoroughly and real values to taken for additionality calculation. Then I’m sure the additionality is not there at all in such a situation.

13)	 How is the base line defined in this project? Is Base line hypothetically defined with no proper evidences and proper justification? In such case, DOE cannot take the base line as suggested by the PDD.  Please check that there are real emission reductions beyond the real and factual base line. It may so happen that this project qualifies for no CER’s. DOE cannot assume values and things as giving by this PP. Whatever values are considered throughout the project in all documents including the real DPR (not the one prepared for CDM, the one given to the banks and others), they must be validated, verified and double checked. Do not ask PP for DPR. Ask the parties who have been given DPR by the PP. Get directly from the bank and others by each page of the DPR and Feasibility report signed. Such document can be considered as a real DPR or FR. UNFCCC CDM process cannot be degraded by fabricating and misinterpreting the project base line and additionality.  

The project is located in Gujarat. GERC order recommends 20% PLF with no derating, while the consultant has considered only 19.28% PLF with 0.3% derating every year. Does it mean that GERC recommended the PLF without assessing the potential? The PLF assumed is very low. Other projects in Gujarat have assumed 20% PLF

Solar PV power project cost has steeply come down of late. Internationally, it is only about 12 to 13 crore per MW. Chinese projects are set up at a cost ranging from $ 2250 / KW to $ 2850/kW. The company must be importing the solar panels from China only. Why should the cost be so high? 
 
The total cost of the project is stated as 3998.83 mn. and the depreciable cost is stated as 3741.83 mn. The difference –257 mn - should be the cost of land. The company is acquiring 148 acres of land for this project. It is not known whether the objective of the projects is generating power or to acquire land. Not only this project, almost all Solar power projects are acquiring vast quantity tracts of land. While land requirement may be more, it is not clear whether the PPs are using the project as a shield to acquire more real estate or it is a genuine requirement. DOE should check other projects mainly those located abroad and compare the land : installed capacity ratio as a part of its validation exercise. 

The assumptions include land lease charges. How can the consultant provide both land cost (as high as 257 mn.) and land lease charges? If it is own land, lease charges cannot arise and if it is lease land, down payment of 257 mn. cannot arise

Though DPR is given as the basis for all the assumptions, no where the consultant has given the date of preparation of DPR, who prepared it – whether it is in house or by a reputed third party and which national Govt. has approved it. It is common to see many PPs preparing the DPR on their own and use it as the basis. DOE should be wary of it and should not accept such DPRs. Unless the DPR is prepared a reputed third party, the DPR as the basis should not be accepted.

Consultant has provided general & administrative expenses at 1% of sales revenue and wages & salaries at 2.4 mn and insurance at 3.8 mn. over and above O&M expenses. What is the O&M cost for, then? How can general & administrative expenses be related to sale revenue? What is the basis for the wages & salaries? It is evident that the consultant is using all means to make the project additional. DOE should check each of these expenses in detail and reject them if they are not supported by credible evidence

Why the consultant has considered BSE 500? What will be the result if Sensex, S&P 500, Nifty or other indices is taken for market return?  Why 5 year period is considered for beta calculation? What is the return interval the consultant has chosen? It is not correct to take 5 year period as the company’s risk characteristics would have changed. DOE should check the beta with shorter duration and consider only the conservative of them all. Anyway, with the benchmark of 13.83%, the return on equity works out to ~25%. EB has recommended 11.75% for Indian energy projects. Therefore, the benchmark is very high and should not be accepted.

Consultant himself declares that even with CDM benefits, the return will not reach the benchmark. Then why CDM benefits are necessary? DOE should read the Validation Methodology carefully before accepting the benchmark and financial indicator