Mismanagement by state-run energy firms cost Rs 169 crore: CAG

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February 10, 2021 2:20 AM

In a report tabled in the parliament on Tuesday, CAG noted that BHEL suffered a loss of 3.83 million euros (Rs 28.35 crore) as Turkey-based Electrik Uretim AS Genel Mudurlugu (EUAS) encashed BHEL’s performance bank guarantee after the state-run firm failed to submit the requisite documents on time. EUAS also terminated BHEL’s contract for the rehabilitation and upgradation of eight units of Keban hydroelectric power plant.

o control the level of these impurities, the Assam renewal plan was conceptualised way back in December 2005.To control the level of these impurities, the Assam renewal plan was conceptualised way back in December 2005.

Shortcomings on the part of state-run energy companies led to adverse financial implications of Rs 168.6 crore, the Comptroller and Auditor General’s (CAG) latest report flagged. The losses, under-recoveries and avoidable expenditures pertain to major firms like Bharat Heavy Electricals (BHEL), Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation (HPCL) and Coal India subsidiary Mahanadi Coalfields (MCL) and NLC India (NLC).

In a report tabled in the parliament on Tuesday, CAG noted that BHEL suffered a loss of 3.83 million euros (Rs 28.35 crore) as Turkey-based Electrik Uretim AS Genel Mudurlugu (EUAS) encashed BHEL’s performance bank guarantee after the state-run firm failed to submit the requisite documents on time. EUAS also terminated BHEL’s contract for the rehabilitation and upgradation of eight units of Keban hydroelectric power plant.

“This order was also of the highest rating R&M works of hydroelectric power project for BHEL and was an opportunity to gain experience of a new area for future references,” CAG noted. Also, BHEL’s Hyderabad-based heavy power equipment plant failed to avail 50% rebate in sewerage cess on water charges, as extended by the Hyderabad water supply and sewerage board, which resulted in avoidable extra expenditure of Rs 21.2 crore during January 2012 to March 2019.

CAG pointed that if ONGC had upgraded and created facilities within the stipulated time in its Assam oil fields, it could have reduced sediments and water levels in its crude oil supplies, saving revenue loss of Rs 27.1 crore between April 2013 and October 2019. ONGC supplies crude oil from the field to Indian Oil Corporation and Bharat Petroleum Corporation and as per the contracts, the selling price of crude falls with higher levels of sediment and water.

To control the level of these impurities, the Assam renewal plan was conceptualised way back in December 2005. The yet uncompleted project, with an estimated cost of Rs 2,465.2 crore, was awarded in March 2009 and was scheduled to be complete in March 2013.

CAG also noted that HPCL’s Visakh refinery failed to install the capacitor banks, which resulted in the payment of excess energy charges of Rs 18 crore from April 2011 to March 2019. Outsourcing contract for lignite excavation without properly assessing the requirement resulted in avoidable expenditure of Rs 28.7 crore for NLC. CAG pointed that MCL allowed excess payment of Rs 45.2 crore to Aditya Birla Group’s Essel Mining from January 2013 to December 2018 through higher electricity costs.

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