Maha-scam, says Aam Aadmi Party; maha-dud, says Mahagenco

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Anjali Damania and Satish Jain alleged that Reliance is buying power at “exorbitant” costs, which are passed on to the consumer in form of high tariffs. Anjali Damania and Satish Jain alleged that Reliance is buying power at “exorbitant” costs, which are passed on to the consumer in form of high tariffs.
SummaryAam Aadmi Party alleged that Rs 22,000 cr had been ‘wasted’ in the past three years in Maharashtra.

The Aam Aadmi Party (AAP) alleged on Thursday that R22,000 crore had been ‘wasted’ in the past three years in Maharashtra due to ‘corruption and inefficiencies’ in the state’s power ministry. Party members Anjali Damania and Satish Jain also alleged that Reliance Infrastructure — which runs the power distribution business in Mumbai — is buying power at “exorbitant” costs, which are passed on to the consumer in form of high tariffs.

Mahagenco, AAP said, had “blown off’ R10,000 crore in capital expenditure without a resultant increase in production. Power generation at the coal-based plants which was 44 billion units in FY08, it claimed had fallen steadily going down to 38 billion units in FY13, although generation should have gone up by five billion units. The plant load factor (PLF) had dropped from 80% in FY06 to 65% in 2013, AAP members said, although R9,000 crore had been spent on repairs and maintenance.

Jain alleged that Mahagenco lifted only 30.05 mt of coal from CIL although it was entitled to lift 41.97 mt; as a result it lost R5,700 crore over three years, AAP said.

Another R2,900 crore was lost, AAP alleged, because due to the purchase of expensive imported coal, which although high in calorific value, costs twice as much as domestic coal.

In a written response in Marathi, Mahagenco observed that the allegation it had not lifted coal from Coal India Limited was baseless adding that CIL had failed to supply the contracted amount under the Fuel Supply Agreement. The coal received from CIL, it said, was 70% requirement and Mahagenco had paid the miner accordingly. Despite the shortage of coal in FY13, Mahagenco said it had clocked a PLF of 68%, close to the national average. Mahagenco said it had generated 28,729 million units power till January 2014, earning R12,557 crore. The genco claimed it had spent less than permitted by the CERC and therefore, the allegation that the company has spent R10,000 crore on capex was incorrect. All the expenses, Mahagenco, said had been subjected to a CAG audit.

Reliance Infrastructure countered the allegations saying its

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