Tangedco pulled up for non-collection of Rs 280 crore levy from power suppliers

Chennai: Comptroller and Auditor General of India has pulled up Tangedco for non collection of levy for short supply of power from suppliers amounting to Rs 280 crore and for extending unintended benefit of Rs 109 crore to suppliers.

The audit report of PSU for the year ended March 31, 2014, which was tabled in the assembly on Tuesday, said that Tangedco had resorted to short term power purchases to overcome the deficit in power availability, as there was delay in finalisation of long/medium term power purchase agreements.

Stating that the system for short term power purchase suffered from the deficiencies such as not firming up the quantity requirements for the shorter period resulting in finalisation of multiple tenders for same periods of supply, it said that the rates obtained in these tenders also fluctuated heavily within short durations ranging between Rs 3.30 to Rs 695 per unit during 2010-14. “Due to operation of many tenders with the same supply period, the suppliers took advantage of the higher rates and supplied maximum quantity of the tender with higher rates without fulfilling their supply obligation for tender with lower rates,” it said, adding that failure to have robust criteria for evaluation of tenders led to avoidable expenditure of Rs 109.60 crore besides extending unintended benefit to the suppliers to the same extent.

The report said that as per tender conditions of the short term power purchase, if the suppliers failed to supply 80 per cent of the monthly contracted quantity, they were liable to pay compensation at Rs 1 per unit for quantum of short supply. “Audit noticed that there was a short supply of 2,649 million units in seven tenders for which compensation of Rs 280.37 crore was leviable. However, Tangedco neither recovered  the compensation (till August 2014) nor recorded any justification for such non recovery, which resulted in extension of undue benefit to the supplier,” it noted.