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• Conditions regarding audit certification indicated above are satisfied LOCAL GOVERNMENTS
• Budget for new Financial Year is approved by council, and a copy furnished to Government

by end of March
• Minimum of 80% expenditure of performance grant funds in the preceding year
• Physical assets funded from performance grant are verified
• Preparation and distribution of a public report on the annual budget of LSGIs and the imple-

mentation of projects using plan funds have been carried out
• Compliance of Environmental Safeguards Management Framework guidelines (ESMF)

Rules regarding purchases and awarding of work contracts have been observed
• Achieving a minimum grade in Performance Assessment

The annual key performance areas which will be assessed would include: (i) planning and
budgeting; (ii) project execution and service delivery ;(iii) accounting, financial reporting and
audit; and (iv) transparency and accountability. The total fund released so far was Rs.878.21
crore of which 63.21% expended. Details of LSGIs, which did not receive performance grant
due to lack of above stated basic fiduciary requirement, are given below.
2011-12: Vattavada & Mangalpady Grama Panchayats
2012-13: Vattavada & Pavaratty Grama Panchayats and Thrikkakara Municipality
2013-14: 80 Grama Panchayats amd 31Municipalities

Box No 8.2

Best Practice
Meenvallom Hydro Electric Power Project (Palakkad)

Meenvallom Hydro Electric Power Project is the first of its kind in India implemented by the
Local Bodies. It is an integrated project of District Panchayat,Palakkad with 8 Block Panchayats
and 17 Grama Panchayats at a total cost of ` 22.00 crore. A company has been registered
for this in 1999 under the Companies Act 1956. Palakkad District Panchayat (`7,93,87,540/-),
8 Block Panchayats and 17 Grama Pancyats (` 83,55,530/-) are the shareholders of this project.
The Detailed Project Report (DPR) was prepared by the Integrated Rural Technology Centre
(IRTC), Mundur for producing 3MW electricity. The project is a Run off the River scheme at
Thoopanad river for which a check dam of 60mts length and 6.5 mts height has been con-
structed. The check dam is having a water storage capacity of 6060 cubic metre. A pen stock
of 581 mt. length has been installed for supplying water from a height of 225 mts. for turning
two Horizontal Pelten Wheel Turbines. Two synchronous generators of 1500KW each have
been connected to the turbines from which 3.3KW electricity is being generated. This has
been increased to 11KW with the help of 2 step up transformers of 2000 KVA capacity. Electic-
ity so generated is applied to Kalladikode Substation of 110KV. As many as 84.7 lakh units of
electricity annually can be generated from this power plant. Areas covering Weir, Penstock,
Powerhouse, Tail Race is coming under the Mannarkkad Forest Division. Civil, Electrical and
Mechanical works has been done by Steel Industries Kerala Limited and Mechanical works
by SILK.

The entire electricity generated from this plant is supplied to KSEB. As per Power Purchase
Agreement of 2007, power is to be distributed at a rate of ` 2.5 for the first 5 years and at a rate
of ` 2.15 for the next 20 years to PSHC. District Panchayat has approached Regulatory Com-
mission for rate revision because as per Electricity Regulatory Commission 2013 Regulation
any small project commissioned after 01.01.2013 is liable to have ` 4.88 for one unit. The Dis-
trict Panchayat, Palakkad has been awarded Bharat Ratna Rajiv Gandhi Gramaswaraj Award
for 2013-14. This best practice can be replicated to other areas of the State for mitigating the
power shortage being faced in Kerala.

Economic Review 2014