State incurred extra expenditure of Rs 840 Cr; Rs 14871 crore power purchase deficit between 2012 -17
Srinagar, Sep 28: The Comptroller and Auditor General of India has slammed the authorities of Jammu & Kashmir government for incurring an extra expenditure of Rs 840 crore due to deficiencies in planning and non-optimisation of power purchase cost during 2012-17.
In its audit report on social, general, economic (non-public sector undertakings) of the Government of Jammu & Kashmir for the year ended March 31, 2017, the auditor has brought out deficiencies in power purchase planning, signing and operationalisation of power purchase agreements, financial mismanagement, deficiencies in billing and collection of revenue and weaknesses in internal control.
The report was tabled in the Parliament earlier week in accordance with the Union Finance Ministry’s directive of June 1994 as Jammu & Kashmir is under President’s Rule for more than one year.
The audit report has revealed that J&K suffered a power purchase deficit of Rs 14,871 crore during 2012-17. “The Department failed to meet its power requirement and the gap between unrestricted demand and self-generation available to the State ranged between 77 per cent and 84 per cent. 73 per cent to 76 per cent of the power requirement of the State was met through purchase from central generating stations. The State suffered a power purchase deficit of Rs 14,871 crore during 2012-17 as against an expenditure of Rs 24,299 crore incurred on power purchase during 2012-17, revenue realisation from sale of power was only Rs 9,428 crore,” reads the report, a copy of which is in possession of news agency—Kashmir News Observer (KNO).
The report has pointed out that the Power Development Department (PDD) incurred an extra expenditure of Rs 840 crore on power purchased during 2012-17 due to deficiencies in planning and non-optimisation of power purchase cost.
During the five-year period, the auditor has revealed that PDD made an avoidable payment of Rs 1,420.26 crore towards late payment surcharge and lost the opportunity to avail rebate of Rs 297.92 crore due to deficient financial management.
“It also had to shell out Rs 33.67 crore towards fixed charges without availing power due to imposition of regulation for delayed payments,” the report states.
The audit report lays bare that the department made an avoidable payment of Rs 543.47 crore towards idle capacity charges and energy charges owing to non-completion of transmission infrastructure for evacuation of power.
The auditor has also pulled up the Department for failing to collect balance outstanding against consumers, stating that it increased to Rs 843.35 crore in 2012-13 to Rs 2,508.23 crore during 2016-17.
“Poor collection efficiency resulted in recoverable revenue of Rs 2,508.23 crore ending March 2017.The Jammu and Kashmir Power Development Department failed to recover its power purchase cost due to operational inefficiencies like increasing gap between Average Cost of Supply and Average Billing Rate, high Aggregate Technical & Commercial losses which were 62.56 per cent in 2015-16 and increased to 67.63 per cent in 2016-17 which resulted in foregone revenue of Rs 10,176 crore,” the report states.
According to the report, the PDD failed to implement revised tariff order approved by the Jammu & Kashmir State Electricity Regulatory Commission resulting in loss of Rs 10.06 crore to the State exchequer. “The Department had not devised any mechanism for filing objections on petitions filed by the generators,” it states.