New Delhi: The Comptroller and Auditor General of India (C&AG) on Monday said that undue favour by Eastern Coalfields Limited (ECL) to contractors due to non-recovery for coal shortage during transportation resulted in avoidable loss of Rs 17.39 crore.
“Despite specific provisions in contract agreement for recovery from the contractor, for coal shortage that occurs during transportation of coal from mine to railway siding, Eastern Coalfields Limited failed to enforce the terms of the contract. ECL, thereby extended undue favour to the contractor and suffered an avoidable loss of Rs 17.39 crore,” the CAG said in its report presented in the Parliament.
The report contains 30 individual observations relating to 16 Central Public Sector Enterprises (CPSEs) under eight Ministries and Departments. Total financial implication of individual audit observations is Rs 3,437.30 crore.
The CAG report highlighted an imprudent decision to invest in a block and infructuous expenditure of Rs 557.59 crore due to subsequent relinquishment of the block. “Oil and Natural Gas Corporation Limited (ONGC) acquired the block with 70 per cent participating interest despite the fact that the Technical Committee had assessed the probability of success in the block as only 11.20 per cent. ONGC surrendered the block to Directorate General of Hydrocarbons in November 2021 citing low gas volumes after incurring an expenditure of Rs 557.59 crore, besides failing to recover the proportionate share of Rs 132.90 crore from partner contractor,” the report said.
It also highlighted about imprudent decision of accepting the Turbine Generator materials amounting to Rs 133.14 crore without service contract led to idling of materials and delay in its commissioning.
“Non-synchronisation of the supply of the material for revamping of three old Gas Turbine Generators at Water Injection platform with service contract by ONGC resulted in delay in commissioning of one Gas Turbine Generator costing Rs 35.02 crore by two years and idling of two Gas Turbine Generators costing Rs 98.12 crore, which are yet to be commissioned despite lapse of seven years,” the report said.
It said that there was delay in clearance of imported consignments on part of ONGC due to delay in receipt of Essentiality Certificate and other operational reasons like late filing of Bill of Entry, wrong delivery order issued by shipping line, delay in obtaining delivery order from supplier and lack of coordination between the departments.
“This led to absorption of demurrage charges to the extent of Rs 58.74 crore by ONGC out of total demurrage payment of Rs 110.61 crore during the period 2016-17 to 2021-22,” the report stated.
Highlighting about the avoidable expenditure of Rs 112.63 crore towards payment of additional deviation charges and penalties for non-maintenance of Grid discipline, the report said that during the period from April 2019 to September 2022, Damodar Valley Corporation (Corporation) failed to restrict drawal of power from grid for 1,193 days (93.64 per cent) when average frequency was below 49.85 Hertz and this resulted in payment of Rs 61.28 crore towards additional deviation charges.
Further, the Corporation failed to make sign change after six blocks for 874 days during the above period in contravention of Deviation Settlement Mechanism Regulations and paid Rs 51.35 crore towards penalty for such violation of sign change. This indicated lack of proper planning in declaring its schedule on day ahead basis and also lapses in monitoring mechanism to restrict over drawal to the extent possible which led to avoidable expenditure of Rs 112.63 crore towards additional deviation and sign change penalty, it said.
The CAG report further said that non-adherence to the credit policy while sanctioning and monitoring of loan led to non-recovery of dues amounting to Rs 393.37 crore.
Referring to the loss of Rs 194.08 crore due to quoting of inadequate bidding rates without determining the pricing components, the report said that the Oriental Insurance Company Limited did not determine the bidding rates for Pradhan Mantri Fasal Bima Yojna in 2019-20 as per terms and conditions of the Agriculture Quota Share Reinsurance treaty with General Insurance Corporation of India, the Re-insurer.
“This led to imposition of the loss corridor clause of the treaty by GIC and consequent loss of Rs 194.08 crore,” it said.
The CAG report said that shortfall in execution and monitoring of project resulted in lower user fee collection of Rs 179.26 crore and payment of force majeure claim for Rs 11.01 crore. “The contractor delayed the work of upgradation of Raebareli-Banda [including two bypasses and Railway Over Bridges (ROBs) at Lalganj and Fatehpur] section," the report said.
