Tamil Nadu: CAG Report Indicts AIADMK Govt for Losses Worth Crores by State Undertakings

Chennai: The Comptroller and Auditor General of India's (CAG)  report has flagged undue benefit to contractors, extra and wasteful expenditure besides loss to exchequer all together running into crores of rupees, in its audit on Tamil Nadu government undertakings tabled in the Assembly on Thursday.

These were related to electricity monolith Tamil Nadu Generation and Distribution Corporation (for year ended March 31, 2019), the liquor entity, Tamil Nadu State Marketing Corporation, a Bio Park, and a cement corporation (audit for these three entities are for year ended 31 March 31, 2018).

 In its report on TASMAC bars run by private parties, the CAG pointed to absence of suitable clause in agreement for an escalation of license fee in case of extension of license period beyond the agreed period.

 This resulted in loss of Rs 18.67 crore to the government exchequer and Rs 19 lakh as agency commission to TASMAC during the extended period of license (July 2016-November 2017) in bars attached to 326 retail vending shops.

 On Tamil Nadu Industrial Development Corporation Bio Park (TICEL Bio Park), the report under the heading "wasteful expenditure," said procurement of lab equipment without deploying the required manpower to handle them resulted in idling of lab facilities worth Rs 17.32 crore for more than four years.

As regards TN Cements Corporation, the report cited undue favour and undue benefit. Appointment of an ineligible agency as a consignment agent and extension of credit facility without any security led to non-recovery of dues of Rs 4.49 crore.

Revision of unloading charges with retrospective effect for two years ending 2014-15 on unjustified grounds led to undue benefit of Rs 75 lakh to the forwarding agents.

On coal supply management, the audit assessed the economy and efficiency of transportation of coal from collieries to load and discharge ports and to the power plants and it revealed lapses and also listed "weaknesses" in TANGEDCO's coal quality assessment system.

As per the coal handling contracts, the contractors were required to pay Wagon Haulage Charges to Haldia Dock Complex under Kolkata Port Trust, and the Visakhapatnam and Paradip Port Trusts at the rate notified by the railways on "rate per wagon" basis.

However, TANGEDCO reimbursed the WHC to its contractors on "rate per MT basis," and audit observed that though the carrying capacity of wagon was enhanced by railways, the rate per MT computed by the electricity monolith was not correspondingly reduced resulting in undue benefit to the contractors.

"Based on the available information only for one year, that is 2017-18, audit worked out the undue benefit to the contractors in respect of all three load ports as Rs 2.55 crore approximately," it said adding the government's reply in this regard was not acceptable.

Tamil Nadu Generation and Distribution Corporation received 71.82 million tonnes (MT) of indigenous coal during 2014-19 from coal companies and transported 70.12 MT through rail-sea-rail route from mines to discharge ports, Kamarajar Port at Ennore here and Tuticorin port for further transportation to thermal power plants.

Out of the remaining 1.70 MT, one tonne of coal from Chhattisgarh during 2017-19 and 0.70 tonne of coal from Singareni Collieries during 2016-18 was transported through rail route to plants.

The audit observed that the cost of operation of unloading coal from ship to the private terminal was costlier by Rs 5.60 per MT to Rs 71.17 per MT, when compared to another coal berth (CB-2) during 2014-19.

"However, TANGEDCO used the private terminal only because of sharing of CB-2 with NTECL (a JV between NTPC and TANGEDCO) without any formal agreement which resulted in extra expenditure of Rs 41.68 crore."

Also, analysis revealed that the actual coal transit loss exceeded the permissible limit as laid down by TANGEDCO (1.5 per cent) in 47 out of 60 months to the extent of 3.85 lakh MTs of coal valued at Rs 58.37 crore.

The Central Electricity Regulatory Commission's norm for transit loss is 0.8% of the total quantity moved.

“TANGEDCO neither analysed the reasons for excess transit loss nor fixed any accountability on the contractor as the contract did not have any clause for recovering the same from the contractor despite knowing the quantity short delivered."

The report also pointed to "unproductive expenditure" of Rs 55.34 crore by TANGEDCO vis-a-vis the Minimum Guaranteeed Quantity (MGQ) matter. While dwelling on MGQ, the report referred to "...an erroneous excess expenditure of Rs 10.61 crore, which is recoverable."

Also, it said TANGEDCO should ensure that coal shortages are recorded at regular intervals and recoveries be effected before closure of contract to protect financial interest. The government entity "may prioritise the reconciliation of transit loss, as it is pending for more than 19 years."

On TN Minerals Limited (report for year ended March 31, 2018), the audit said operation of a mine despite knowing the poor quality of granite resulted in infructuous expenditure of Rs 71 lakh.