Aam Aadmi Party Chief Arvind Kejriwal must feel like a vindicated man after the Comptroller and Auditor General (CAG) said in its damning report on power distribution companies (<g data-gr-id="51">discoms</g>) that there is a significant scope for reducing tariffs in the city. The report further found that the three private <g data-gr-id="52">discoms</g> in the national capital inflated their dues to be recovered from consumers by a whopping Rs 8,000 crore. The CAG audit has raised several pertinent questions on the way <g data-gr-id="53">discoms</g> have been carrying out their day to day business with many of their sister concerns, often without the requisite transparency, and egregious instances of conflict of interest.
The two Anil Ambani group-controlled <g data-gr-id="54">discoms</g>, BSES Rajdhani Power Limited and BSES Yamuna Power Limited, reportedly acquired material and services worth Rs 1,428 crore from their sister concern Reliance Energy Ltd (REL). What is galling is that none of it was done with the approval of the board of directors of the two <g data-gr-id="55">discoms</g>, among whom are listed <g data-gr-id="40">government</g> nominees. In the case of Tata group’s TPDDL, it paid at least Rs 93.50 crore to its own power generation plant in Rithala as fixed charges though no power was supplied from this plant since March 2013. Amusingly the payment is carrying on even now. This is not the first time that the general public has been scammed by a power company.
A jog back memory lane would reveal that this has happened before in India. The Enron scandal happened quite a number of years <g data-gr-id="49">back</g> but the modus operandi which was followed in the scandal mirrors the accounting practises allegedly followed by the <g data-gr-id="56">discoms</g>, as revealed in the CAG report. The general public would remember how Enron’s collapse may have begun with the kind of misadventures it engaged in half a world away in the quiet coastal villages of Dabhol, India. In 1992, the Enron Corp. announced it would build a $3 billion natural-gas power plant in Dabhol in the western state of Maharashtra. The project was to be the poster child of economic liberalisation in the country, the single largest direct foreign investment in India’s history. Instead, Enron in India turned into an unprecedented economic disaster. From the get-go, the Dabhol project was mired in controversy.
Enron worked hand in hand with corrupt Indian politicians and bureaucrats in rushing the project through. It is revealing that even then one of the alleged culprits was a Reliance-<g data-gr-id="57">owend</g> company. Charges filed by an Indian public interest group revealed that Enron and Reliance bribed the Indian petroleum minister in 1992-93 to secure the contract to produce and sell oil and gas from the nearby Panna and Mukta fields to supply the plant. <g data-gr-id="33">Thus</g> it is safe to posit that the revelations by the latest CAG report gives one an eerie sense of deja vu. Prima facie, the revelations in the CAG report are damning for the power <g data-gr-id="58">discoms</g> who have been fighting a protracted turf war with the Aam Aadmi Party.
The Aam Aadmi Party has been calling for the <g data-gr-id="59">discoms</g> to slash tariffs, a demand which the <g data-gr-id="60">discoms</g> have refused consistently. When they have complied it is with great reluctance and feigned sorrow. The report also raises scathing questions over the conduct of Delhi Electricity Regulatory Commission (DERC) and government nominees on the board of the three <g data-gr-id="61">discoms</g>. The CAG audit endorses the claims of the Aam Aadmi Party and other activists that high power tariffs in Delhi were unjustified.
The 49-day-old AAP government led by Arvind Kejriwal had ordered the special CAG audit of the power sector on January 1, 2014. It is high time that the power companies in Delhi stopped playing this nefarious power game and give the people of Delhi what they need the most. Cheap power at a reasonable cost. Delhi would do well to avoid another Enron. This CAG report is an early alarm bell.