It is evident from the PDD that the values are consistent and it is definitely forged and cooked up values to show a non CDM project as a CDM project. What is this? 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. After careful study of PDD it is found that DPR/FR is in different versions made and submitted with different purposes to different agencies which is totally unacceptable, illegal and unethical. PP/Consultant may 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. 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. In this particular project there is clear cut evidence that DPR/FR values are changed/ fabricated mischievously and intentionally. This 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. 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. This project is a fabricated and fake CDM project and must be rejected by the DOE right away. DOE should not support this kind of projects otherwise CDM EB should suspend this DOE for at least one year. 

If you carefully read through the PDD it is confirmed that this is not a genuine CDM project at all. What is the exact project cost? The project cost is covering what? 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 is very clear 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. It looks like PP is purchasing second hand or second quality equipment by 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 this project. How is the base line defined in this project? Base line is hypothetically defined with no proper evidences and proper justification. 
DOE cannot take the base line as suggested by the PDD.  Please note that there are no emissions beyond the real and factual base line. This project definitely qualifies for zero CER’s, not even one CER. 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 Feasibulity report signed. Such document can be considered as a real DPR or FR. This project is genuinely a fabricated, false and misinterpreted project with no base line and additionality.  

Dear Sir,

With respect to this project, please consider the following comments:

From the information given it is not possible for any reader to calculate financial indicator and arrive at the same results. Two important parameters, viz., tariff and NCV of rice husk have not been given. Surprisingly, NCV of rice husk does not even form part of monitored parameters! It is proper that this PDD is re webhosted giving all information. EB should take note of this as all projects are now webhosted with little or no information as it enables them to change the input figures to make the project additional during validation

As per publicly available information (Pollution control Board clearance), 60% of the rice husk requirement is to be met from in house generation and 40% from purchases. DOE should ensure that the same cost is not taken for the rice husk for purchases and in house generation. In the case of own generation, transportation cost is nil. Since transportation cost constitutes almost 50% the cost of husk consumed from the factory should not be more than Rs.600 / MT. DOE should check the quantity of rice husk generated by the company based on last 3 years record. 

Again as per publicly available information (fifth meeting of State level Expert Appraisal Committee Chhatisgarh held on 24/05/2008) the cost of the project is only Rs.42 crore. Even CERC has recommended a cost of Rs.4 crore / MW only. The cost has been increased by 25% to make the project additional.  This cost is very high. Number of projects has been registered at much lower cost.

The WACC of  13.07% will result in considering >25% return on equity. CERC has recommended only 16% ROE. Even the latest guidelines on Investment analysis (Annex 13, EB 61) provides for only 11.75% return on equity. This return is very high. This is done only to make the project additional

When other biomass based power projects have considered calorific value of 4000 – 4500 kcal/kg. for coal, on what basis the project developer has considered only 3502 kal/kg?

This is a part of an existing profit making company. The project is entitled for 100% depreciation in the first year (80% accelerated depreciation plus 20% additional depreciation) as it is a biomass project based on agricultural waste (see Income Tax rules and sec. 32 of IT Act). Hence, the tax saving enjoyed by parent company should be taken into account as notional income in computing IRR. After all it is for this purpose (to save tax) that this project is set up

The project is entitled to tax holiday for 10 consecutive years in the first 15 years. DOE should ensure that the tax savings and tax holiday are taken into account in IRR calculation.  

When these are taken into account and the ROE is reduced to 16%, the project will be non additional. 
  
Yours sincerely
Karthikeyan