Karnataka: Power purchase probe says losses and losses over the years
Energy Minister Mr D.K. Shivakumar, who tabled the report, said that he would let the house debate the report and decide.
Belagavi: The much awaited House Committee report on irregularities in power purchase and other power related issues between 2004-2014, has turned out to be a mere bunch of findings, and has no concrete recommendations in it.
Energy Minister Mr D.K. Shivakumar, who tabled the report, said that he would let the house debate the report and decide on what should be done on the findings. Apart from some of the deliberations of meetings, the report has observations by the CAG and a note by JD(S), pointing to losses to the tune of Rs 5895.14 crore for seven years between 2011-2018.
The BJP on its part has alleged that during the last days of Mr H.D. Kumaraswamy’s tenure as CM, the Power Department had incurred a loss of Rs 63 crore in 2007, since the department re-tendered coal supply with M/s South India Corporation bagging the tender.
Between 2004-2014, the state government had purchased over 4,49,725.29 mu power at a cost of Rs 1,11,125.8 crore. The cost of purchase from private parties during this period witnessed a steep increase from 2004 to 2014, where the government paid Rs 8.55, Rs 11.51, Rs 12.39, Rs 8.66 and Rs 7.77 per unit respectively. The state government also failed to utilise over 3844 MU power allocated by the Centre during this period.
The committee noted that between May 2011, the government cancelled the long term tender of JSW, which had to supply power at Rs 3.812 per unit and placed an order for short term supply of power for the next three years paying a higher price. This led to excess payment of Rs 1046.03 crore between 2011-2014.
Committee member Mr K.N. Rajanna expressed his suspicion that JSW purchased land by paying an exaggerated price, which is known as the Rachenahalli denotification case, registered by the Karnataka Lokayukta. The deal was between JSW and Davalagiri Enterprises, the company owned by family members of former CM and BJP state president Mr B.S. Yeddyurappa.
Meanwhile, the government gave a contract to wash the coal purchased from Singareni Collieries, Mahanadi Coals Field and Western Coalfields between 2002 and 2008. During this period, the government incurred a loss of Rs 1590.31 crore. The system has been started again from 2015-16, the committee noted.
In its note, the JD(S) cited a cabinet note, seeking to cancel tender for long term supply of power, citing higher cost compared to other states and a proposal to float a fresh tender. On May 5, 2011, the cabinet endorsed the proposal. Based on the cabinet decision, the government cancelled the tender of JSW and started purchasing power from the same company at a higher cost of Rs 4.26 to Rs 5.5 per unit. The long term tender cost of JSW was Rs 3.849 for 25 years. This led to a loss of Rs 5895.14 crore for seven years and this would be around Rs 29,213 crore in toto, the JD(S) letter stated.
The JD(S) also expressed its reservation over revision of power purchase price by UPCL, which was originally signed for Rs 2.25 per unit, which was being purchased at a cost of Rs 4.85 per unit in 2011-12 and is now being purchased at Rs 4.90 per unit presently. The excess payment due to this discrepancy from 2010-11 and 2017-18 are Rs 9668.65 crore and Rs 8335.37 crore respectively, the JD(S) note pointed out.
The committee has recommended that the RTPS was 25 year old and had to be upgraded as it was breaking down too often. Even hydro-electric projects were facing repeated breakdowns and has to be upgraded. It also wanted supply of coal to thermal power projects to be ensured.
The committee wanted closure of the pact with Chhattisgarh to supply power and said the T&D loss was pegged at 23% and action should be taken to reduce it. Action should also be taken to complete power projects, so that the state need not resort to power purchase. The panel also wanted alternative renewable sources to be encouraged and recommended initiation of action on discrepancies pointed out in the report.
Chhattisgarh coal pact still on: D K Shivakumar
Energy Minister, D K Shivakumar clarified on Tuesday that the state government had not cancelled an agreement with the Chhattisgarh government on coal blocks .
Replying to members in the Legislative Council, the Minister said he had read in newspapers about Mr Singh's statement on Karnataka cancelling its agreement with Chhattisgarh, but said it was false and baseless.
"Mr Singh's statement is false and baseless. The decision on allotment of the coal block was signed by former Chief Minister, B S Yeddyurappa and the then Energy Minister, Shobha Karandlaje. The Karnataka government has already invested a lot of money and constructed the compound wall around the site. The lifting of coal from the allotted site will begin soon," he added.
Mr Shivakumar said the coal situation was very grim in Karnataka and the present stock was sufficient for just half a day. Several units at the Raichur Thermal Power Plant had shut for want of coal. All thermal plants in Karnataka were badly in need of coal for power generation.
Opposition Leader, K S Eshwarappa charged that the previous government at the Centre led by the Congress did not allot the coal blocks despite repeated appeals. After much persuasion, the Chhattisgarh government agreed to allot the coal block for Karnataka.
Mr V Somanna of the BJP said it was a 'tragedy' that Karnataka did not do anything over the last four- and- a- half years to lift the coal from the allotted site.
Mr Shivakumar sought the BJP members' help to meet the Union Minister concerned and resolve the issue.