In another sign that India?s public sector has as many skeletons in the closet as scam-hit Satyam Computer Services, the Comptroller & Auditor General of India (CAG) has found irregularities to the tune of Rs 6,269 crore in just eight central public sector enterprises (CPSEs). The accounting fraud at Satyam is estimated to be worth Rs 7,800 crore, but the CAG?s findings show that the overall losses due to irregularities in the country?s 242 central PSUs would be much higher.
In a report tabled in Parliament on Tuesday, the CAG highlighted inconsistencies mainly in the functioning of National Textiles Corporation (NTC) and Oil and Natural Gas Corporation (ONGC). NHPC?which will float an initial public offer on August 7 to raise approximately Rs 6,048 crore, Indian Oil Corporation, Bharat Sanchar Nigam Limited, Chennai Petroleum Corporation, NEEPCO and Export Credit Guarantee Corporation are the other firms the CAG picked up for audit.
NTC, which is one of the sick firms the government is trying to revive through joint ventures and sale of unviable units, sold land and building without following the pricing and tendering procedures set by the Board for Industrial & Financial Restructuring and the government, due to which it received Rs 882 crore lower than the potential receipt, the CAG found.
It sold land lower than the reserved price in 26 of the total of 79 unviable units. ?The company also did not considered the valuations given by consultants and the Central Board of Direct Taxes,? CAG director general (commercial) KP Sasidharan told reporters highlighting the findings of the report for 2007-08, which has been referred to Committee on Public Accounts.
ONGC showed inefficiencies in drilling and prospecting of oil wells, with the result that it made an excess expenditure of Rs 610 crore.
First, it could drill only four of the 22 wells within the grant period of four years and had to pay a petroleum exploration license fee on extension of grant period. Then, the company showed lethargy in performing the minimum work in seven of the 17 New Exploration Licensing Policy blocks.
In a finding that may hamper NHPC?s attempt to raise money from stock markets, the hydro power producer could not increase its capacity even by an iota in the last five year plan (2002-03 to 2006-07) against the planned expansion of 642mw. Further, it utilised only 58% of the allocated plan outlay of Rs 6,853 crore during the plan period.
The shortfall was mainly on account of delayed environmental and forest clearances, slow investment decisions and taking ?inordinately long time? in the tendering process ? sometime as long as 14.45-33 months, the CAG stated in the report.