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CAG raises questions on power corporation's working

punjab Updated: Mar 22, 2015 08:28 IST
Vishal Rambani


In its report that has been tabled in the Punjab Vidhan Sabha, the comptroller and auditor general (CAG) has made scathing remarks on the working of the Punjab State Power Corporation Limited (PSPCL).

From the largesse to the coal supplier to the delay in installing meter boxes; and from avoidable burden of interests because of late payments to other financial mismanagements, it all figures in the CAG report.

For reducing aggregate technical and Commercial (AT and C) losses, the PSPCL had planned to shift 17.92-lakh meters outside consumer premises for Rs 1,005 crore. The project was approved in 2013 and was to close on November 30, 2014.

The corporation, however, was able to shift only 0.44-lakh meters (2.61% of the target) till March 2014. "At this pace, the AT&C losses will never be reduced," said the CAG report, pointing poor planning and implementation of the project.

The audit also revealed late payment to small-scale industry (SSI) for transformers, conductors and other equipment put Rs 47.81-crore interest burden on the PSPCL. The money was paid between March 2009 and January 2012. The Ancillary Industrial Undertaking Act, 1993, makes the buyer liable to pay the interest in case of delayed payment. "Despite knowing about this provision, the corporation went into a legal battle with the SSI units, which led to an additional minimum liability of Rs 8.72 crore," said the CAG report.

The auditor didn't buy the management excuse that the delay was on account of the shortage of funds. It has pointed out that there was ample margin in the borrowing limit of the PSPCL when the payments were delayed. It said that the corporation incurred avoidable octroi payment of Rs 2.30 crore by delaying the decision to shift the central store out of the Ferozepur Cantonment Board jurisdiction. Octroi is abolished in Punjab but the cantonment boards still charge it.

The report says that not taking up a matter of turbine repair with Bharat Heavy Electrical Limited (BHEL) within the warranty period cost the corporation Rs 1.91 crore. The CAG also objected to the PSPCL's contributing Rs 25 crore to Punjab State Cancer and Drug Addiction Infrastructure Fund. "Since the PSPCL is loss-making, its decision was against the Company Act," says the report.