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CAG has also criticized the way in which tenders were awarded, in a report presented in Parliament on Friday. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)
CAG has also criticized the way in which tenders were awarded, in a report presented in Parliament on Friday. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

Hydropower firms face CAG’s criticism

Criticizes functioning of NHPC, SJVN, THDC, Neepco for causing generation loss of 26,283 million units

New Delhi: The Comptroller and Auditor General of India (CAG) has criticized the functioning and performance of government-owned hydropower generation companies such as NHPC Ltd (NHPC), SJVN Ltd, THDC India Ltd and North Eastern Electric Power Corp. Ltd (Neepco) for causing a generation loss of 26,283 million units.

Apart from cost escalation and inordinate delays in the projects, CAG also criticized the way in which tenders were awarded, in a report presented in Parliament on Friday. It cited NHPC as a case in point. “In five out of the 16 contracts examined in audit, NHPC relaxed PQ (pre-qualification) criteria after the close of sale of tender documents... NHPC extended undue favour to M/s HJV (led by Maytas Infra Ltd) in fixation of PQ criteria, relaxation of PQ criteria after close of sale of tender documents and also award of work though M/S HJV did not fulfil the PQ criteria. NHPC also extended advances of 131.65 crore to it beyond contractual provisions," the report said.

An NHPC spokesperson didn’t comment until press time. The report added: “Delay in execution of 16 projects by four CPSEs (central public sector enterprises) resulted in revision of their initial approved cost of 30,005 crore to 44,712 crore. In seven completed/ongoing projects, the cost overrun was in the range of 53 to 148%."

The report has been issued amid concerns about faltering hydro power generation in the country. Hydropower accounts for 39,291.40 megawatts (MW) of India’s 205,340.26MW power-generating capacity. The power transmission failures recently that left 620 million people without electricity has deepened worries about the country’s ability to meet rising energy requirements. While these companies aimed to add a capacity of 11,813MW during the 11th Plan period (2007-2012), even the revised target of 6,794MW couldn’t be met due to project delays. These state-owned units could only add 1,550MW at the end of the plan. To make matters worse, CAG is of the opinion that these government-run companies are likely to add only 3,774MW capacity in the 12th Plan (2012-17) against a target of 14,535MW.

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