The CAG has slammed an Andhra Pradesh government firm for paying Rs 14.33 crore to an aviation company without even utilising any services.
The CAG has slammed an Andhra Pradesh government firm for paying Rs 14.33 crore to an aviation company without even utilising any services. Andhra Pradesh Aviation Corp Ltd (APACL), an arm of the state government, paid a whopping Rs 14.33 crore to Saras Aviation Services (SAS) “for hiring of helicopters” without proper assessment of the flying hours, the Comptroller and Auditor General of India (CAG) has said. In a report on PSUs for the year ended March 2016, the CAG exposed the “dubious payments” the APACL made to SAS in 2014-15. The auditing agency also picked several holes in the running of the APACL, which incurred a total expenditure of Rs 20.74 crore in 2014-15 for hiring helicopters for VIP use.
Ever since he became Chief Minister on June 8, 2014, Chandrababu Naidu had been using only chartered aircraft and helicopters for official as well as (occasional) personal use. Interestingly, the CAG audit related to the hiring of helicopters only and not the aircraft. APACL entered into an agreement with SAS in September 2014 for hiring single or twin engine choppers for a minimum of 100 hours of flying per month at the rate of Rs 2.50 lakh per hour.
The hiring period was supposed to begin on October 1, 2014 for a period of five years, with a minimum guarantee fee of Rs 25 lakh per month, the CAG said in its report. “After a lapse of nine months from entering the agreement, the company arrived at the requirement of 45-50 hours of average flying. However, no formal amendment was on record in respect of the reduced average flying hours.
“The agreement was executed without any assessment of the flying hours for which helicopters were to be hired.” “The company paid Rs 5.06 crore to SAS for the period July-September 2014 towards utilisation of hired helicopters though the agreement with the service provider was effective from October 2014. “In the absence of records pertaining to utilisation of hired helicopters, the genuineness of the above payment could not be verified,” the CAG added.
“As per clause 12.1 of the agreement effective from 1 October 2014, the minimum guaranteed flying charges were Rs 25 lakh for 100 hours per month. “However, the APACL paid Rs 5.06 crore from October to December 2014 and Rs 4.21 crore from January to March 2015 towards flying charges at 60 hours and 50 hours per month respectively,” the CAG said.
Referring to the functioning of APACL in the preceding years, the CAG noted non-collection of rentals from the hiring parties had resulted in it foregoing source of revenue and the company had to depend on budgetary support. “Keeping the insurance amount of Rs 59.85 crore in current account had resulted in loss of potential interest revenue of Rs 7.18 crore,” it added.