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Power ministry wrongly awarded contracts, underutilised funds: CAG

Power ministry wrongly awarded contracts, underutilised funds: CAG
‘Unreliability of data is a matter of concern as assurance on achievement of targets that were being  reflected in various proposals and the data of the Rural Electrification Corporation Limited (REC), was difficult to obtain,’ CAG report, which was tabled in  Parliament on Tuesday, reads.

While elaborately highlighting the ill-practices in allotting contracts, the report reads, ‘There  were  cases  of  undue  favour  and  violation  of  rules  and  procedures  in  award  of  contracts. In the test-checked cases, 29 projects amounting to Rs 548.61 crore were awarded to ineligible contractors in two states. Further, undue benefit of Rs 114.40 crore was extended to the contractors on account of permitting higher rates, non-deduction of taxes, etc. which also resulted in avoidable increase of project costs by that amount.’

In March 2005, the MoP launched RGGVY to accelerate the pace of village electrification. The ministry also merged all existing rural electricity programmes with RGGVY for better outcome. The main objective behind the project was to electrify all villages and habitations, provide electricity to all households, giving electricity connection to ‘below poverty line’ (BPL) families, free of charge as well as to accelerate rural development. RGGVY was  launched  to  fulfill  the  commitment  of  the  National  Common  Minimum Programme (NCMP) of completing household electrification in five years by 2009. The target for village electrification was 1.25 lakh un-electrified villages and 7.80 crore rural households including free electricity connections to 2.34 crore BPL households by 2009.

However, the CAG report revealed that the MoP  did  not  conduct  feasibility  study  before  launching  the  scheme,  despite recommendations from the Standing Committee on Energy, which had sought updated  statistics on rural electrification from other states and modify  the  rural electrification  programme in the light of updated statistics. ‘Unfortunately, the MoP did not have complete information from all states even by September 2008, indicating that the basis of figures used for both X and XI Plan was not sound,’ the report reads.

The CAG claims there are inadequacies in identification and estimation of un-electrified villages and BPL beneficiaries at the planning stage, which had an impact of variations in the cost estimates to the extent of Rs 2,262 crore. The audit agency has found that none of the project implementing agencies (PIAs) undertook a survey prior to start the schemes.  It was also found that the BPL household data, in seven north eastern states, was taken from the Census of 2001 by the PIAs without considering growth in rural population.

The REC was the nodal agency for the scheme responsible for overall implementation including project scrutiny and appraisal, co-ordination, monitoring and release of funds. The scheme was further implemented by PIAs, which includes state power utilities, Electricity Distribution Companies (DISCOMs), State Electricity Boards (SEBs) and Central Public Sector Undertakings (CPSUs). The audit agency has exposed that none of the PIAs undertook a survey prior to formulating Detailed Project Report (DPR) and due to the ‘callous’ attitude Jammu and Kashmir and Sikkim were not notified in their RE Plan till August 2013.

‘Against the total  approval  of  Rs 33,000  crore  for 10th  Plan  and  first two  years  of 11th  Plan  by Cabinet Committee on Economic Affairs (CCEA),  allocation  of  funds  during  2004-12  as  per  budget  estimates  and  revised  estimates was Rs 31,338.00 crore and Rs 27,488.56  crore  respectively.  The MoP did not fully utilise the funds allocated under the scheme and released Rs 26,150.76 crore to REC up to March 2012. The ministry of finance, in December 2007, also emphasised linking the spending of funds with the achievement of physical targets so that effectiveness of the scheme may be ensured,’ the report reads.
Sujit Nath

Sujit Nath

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