Complaints galore, Punjab orders third-party audit of PSPCL
The govt, in its first cabinet meeting, had decided to conduct the audit following complaints of irregularities and mismanagement within the corporation
Aiming to rein in irregularities and mismanagement within the Punjab State Power Corporation Limited (PSPCL), the state government has ordered a third-party audit of the corporation for its operations in the past five financial years.
The decision for the first-of-its-kind audit of any government department was taken in the first cabinet meeting of the Captain Amarinder Singh-led government on March 18.
Having an annual budget of over Rs 20,000 crore, PSPCL’s spending of ₹1 lakh crore will undertaken and all long-term power purchase agreements will be audited. Power theft in all prominent Akali leaders’ strongholds at above 40% against the state average of 15% had also raised eyebrows over the anomalies in the corporation. Tubewell connections released on the recommendation of Akali leaders will also be probed.
The power body pays Rs 2,700 crore annually as fixed charges to private thermal plants, eroding its financial health, besides making power costlier.
The government has even floated a tender to hire an auditor for performance review of PSPCL in the matters of power generation, procurement, power sale and surrender, coal linkage and coal procurement, capacity addition vis-a-vis utilisation, material procurement and utilisation, fund management, release of connection, review power theft losses including supply to agricultural sector.
The audit was one of the major poll promises of the Congress as party president Sunil Jakhar had raised the matter before elections, accusing the Shiromani Akali Dal (SAD) government of causing heavy losses to PSPCL to nurture the interests of private players, apart from using the body for political motives.
Power engineers had also previously demanded the audit, alleging various irregularities committed by the management, especially after the arbitrary extension of KD Chaudhary, the then PSPCL chairman and managing director in February 2014, and other directors by the erstwhile government.
The PSEB Engineers Association had through written complaints alleged that disregarding the rules, PSPCL management had taken arbitrary and mala fide actions to benefit some firms and people in quid pro quo arrangement.
Other allegations included large-scale irregularities committed by the PSPCL management, including loss of ₹500 crore to PSPCL due to abnormally high rates awarded to private companies under Part B of Restructured Accelerated Power Development and Reforms Programme (R-APDRP) scheme worth Rs 1,700 crore and loss of Rs 1,231 crore to PSPCL on account of non-recovery of liquidated damages due to delay in commissioning of private thermal plants at Talwandi Sabo and Goindwal Sahib.
The role of non-operation of PSPCL coal mine, and purchasing coal from outside, will also be audited as there are allegations that non-operation of coal mine caused a loss of ₹400 crore in the last two years, which further compounded because of loss of Rs 200 crore due to import of coal from M/s Adani.
In case of Talwandi Sabo thermal plant, use of unwashed coal has led to loss of Rs 500 crore to PSPCL on account of higher power purchase cost and undue financial benefit of Rs 350 crore on account of saving of washing cost. The association had also alleged financial benefits amounting to several crore to M/s Nucon, a transformer manufacturing firm, and other private firms.
“At every organisation, audit is needed to make improvements, and this is also a step in that direction. The audit will highlight the areas of shortcomings, and also list where we can improve to provide better services to consumers with cost effective electricity,” said A Venu Prasad, principal secretary, power department, Punjab.