CAG detects Odisha power utility loss on low rate sale
"The company (GRIDCO Limited) incurred a loss of Rs 10.38 crore due to sale of surplus power at lower rate through unscheduled interchange (UI) route," CAG said in a report for the year ended March 31, 2010.
Giving details, it said the company issued a tender notice for sale of 250 MW surplus power during October 5 to 20, 2007 on "take or pay basis", against which the offered rates of three parties ranged between Rs 3.08 and Rs 3.76 per unit.
The tender committee, while recommending for cancellation of the tender not being lucrative, suggested to offer 50 MW round-the-clock power to Tata Power and Trading Company Ltd (TPTCL) and LANCO Electric Utility Ltd at Rs 6.15 per unit, the CAG report said.
TPTCL and LANCO also offered to purchase 76.80 million units at Rs 6.03 per unit and 4.20 million units at Rs 6.24 per unit, respectively during October 5 to 20, 2007, it said.
The CAG observed that the Director (Commercial), a member of tender committee, did not take any action on committee`s recommendation on offers of TPTCL and LANCO for getting the approval of Chairman-cum-Managing Director for sale of power.
As a result, the company failed to trade surplus power (81 million units – MU) at higher rates of Rs 6.03 and Rs 6.24 per unit offered by TPTCL and LANCO, it said.
Ultimately, it resorted to sell this surplus power through unscheduled interchange route at lower rate of Rs 4.76 per unit during October, 2007, which resulted in loss of Rs 10.38 crore, the report said.
CAG also termed as unacceptable the management`s claim in June 2010 that since the market rate of power was Rs 3.76 per unit, placing of order at Rs 6.15 per unit would not have been transactable.
It pointed out that Adani Enterprises Limited purchased 22.85 (MU) and 58.25 MU at Rs 6.15 and Rs 6.12 per unit, respectively from the company in October, 2007.
Further, the company also sold surplus power at Rs 7.10 to Rs 7.40 per unit during January-March 2008, it said.
CAG recommended that the management should put in place the system of obtaining the approval of the competent authority expeditiously to trade its surplus power for maximisation of revenue.