Govt owes power generator Rs 2,800 crore, reports CAG

The financial position of the J&K State Power Development Corporation (SPDC) has been affected as it has not received payment of power bills worth crores of rupees from the Power Development Department (PDD), which distributes the power in the state.The SPDC, which generates power from 21 hydro projects and sells the energy generated to the PDD, has been turned into a borrower as the PDD has not paid bills of Rs 2,808.04 crore since 1999.“The PDD had not paid the dues regularly since 1999 and the pending amount has accumulated to Rs 2,808.04 crore as of March 2016,” read the report compiled by the Comptroller and Auditor General (CAG).The CAG said the pending bills adversely impacted the SPDC as it had to take loans at interest rate, ranging from 9.75 per cent to 13.75 per cent, to fund its needs.From 2012 to 2014, the government formed a budget sub-committee which decided that the PDD’s huge bills will be settled against the Plan Funds and the State Equity in the SPDC by the government. However, the government did not comply with its own order.The SPDC, which has been rendered as a defaulter, owes bills amounting Rs 1,575.61 crore to the Irrigation and Flood Control Department as water usage charges from November 2010 to December 2015.The SPDC has also failed to provide requisite information to the State Electricity Regulatory Commission (SERC) which led to non-inclusion of income tax of Rs 96.96 crore in the tariff fixation.“Due to non-achievement of design energy, the corporation was not able to recover an expenditure of Rs 275.85 crore through the tariff,” the CAG said.The company failed to achieve the status of mega power project is respect of Baglihar Hydro Electric Power Project-II due to which the benefit of Rs 105.80 crore could not be availed, it said.The CAG has recommended that the PDD should immediately pay the power bills to the SPDC to minimise its debt and interest burden. “Improve financial management to ensure that loan funds are linked to their actual utilisation,” the CAG said.Power corporation forced to take loans

  • The CAG said the pending bills adversely impacted the SPDC as it had to take loans at interest rate, ranging from 9.75 per cent to 13.75 per cent, to fund its financial needs
  • From 2012 to 2014, the government formed a budget sub-committee which decided that the PDD’s huge bills will be settled against the Plan Funds and the State Equity in the SPDC by the government. However, the government did not comply with its own order
  • TRIBUNE INDIA
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