Power ministry wrongly awarded contracts, underutilised funds: CAG
12 Feb 2014 12:18 AM GMT
‘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.
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.
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