Indian City Kolhapur Struggles to Find Economic Model to Finance LED Streetlight Project

More than a year has passed since Kolhapur, a city in the western Indian state of Maharashtra, had launched tenders and appointed a firm to install the new LED lights, but the city council has not found a sustainable economic model to finalize the feasibility of the INR 280 million (US $4.12 million), reported The Times of India.

Finding funds to foot the lighting bill has proved difficult for Kolhapur Municipal Corporation (KMC), which has considered two economic models for the project. One involves seeking funds from the government and the other is to execute the project on a public-private-partnership (PPP). The second option looks into enabling a private company to invest in the project financially and be paid from KMC saved power consumption and electricity costs.

Netradip Sarnobat, the KMC's chief city engineer, said, "The state government suggested that a firm be appointed to undertake the work. The standing committee has rejected the suggestion and we will now rework the project."

KMC will upgrade 23,000 sodium vapor lamps with LED lights over a 10-year period, which is expected to halve the current electricity bill for streetlights. The plan is mainly proposed for the suburbs and newly developing areas without streetlights.

A KMC official said: "There is no chance that the KMC will get a huge amount from the state to execute the project. Corporators are skeptical about executing the project on PPP basis as no other municipal corporation has executed such a project using this model."

The city has more than 60,000 streetlights across the city, but many are not functioning because of high maintenance costs. 

According to a civic official the appointed firm will cover the streetlight maintenance for 10 years. The company will be able to recover the amount it invests within the first seven years.

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