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NTPC subsidiary incurred Rs 137.87-cr loss due to failure to meet CERC norms: CAG – EQ Mag Pro

NTPC subsidiary incurred Rs 137.87-cr loss due to failure to meet CERC norms: CAG – EQ Mag Pro

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In a performance audit report, the CAG has said that an NTPC subsidiary incurred a loss of Rs 137.87 crore due to its failure to achieve the norms fixed by the CERC

The NTPC subsidiary failed to achieve the norms fixed by CERC for gross station heat rate, auxiliary power consumption and specific fuel oil consumption

KBUNL has also been unable to adhere to the emission norms and norms for utilisation of ash fixed by Ministry of Environment, Forest and Climate Change, said the CAG

New Delhi: In a performance audit report, the CAG (Comptroller & Auditor General) has said that a wholly owned subsidiary of NTPC Ltd in Bihar, Kanti Bijlee Utpadan Nigam Limited (KBUNL) incurred a loss of Rs 137.87 crore between 2015-16 and 2019-20 due to its failure to achieve the norms fixed by the CERC (Central Electricity Regulatory Commission). “Kanti Bijlee Utpadan Nigam Limited (KBUNL) had been set up to revive the power plant of Bihar State Electricity Board and to set up new projects to cater to power requirements of the nation. The Company however, even after 15 years of its operation, was unable to operate at full capacity and its operations have continued to remain constrained,” said the CAG report which was released on Tuesday.

NTPC subsidiary failed to achieve norms for gross station heat rate

The NTPC subsidiary failed to achieve the norms fixed by CERC for gross station heat rate, auxiliary power consumption and specific fuel oil consumption due to non-scheduling of power for Stage I units and installation of oversized machineries in Stage II units. This resulted in higher cost of generation and non-recovery of energy charge rate. The projects under Stage II units were delayed which resulted in time and cost overrun. The actual cost increased by 65 percent (Rs 2,063 crore) over approved cost, said the CAG.

Due to delay in completion of projects, CERC disallowed Rs 121.99 crore of fixed charges claim of KBUNL.

Rs 74.39 cr not recovered; Rs 49.93 cr penalty paid to coal companies

The risk and cost amount of Rs 74.39 crore was not recovered from defaulting contractors due to inaction or delayed action.

A penalty of Rs 49.93 crore was paid to coal companies due to short lifting of coal and further, substantial grade slippage during transportation of coal from loading to unloading points led to excess payment made by KBUNL on this account, said the CAG.

KBUNL failed to meet emission norms: CAG

KBUNL has also been unable to adhere to the emission norms and norms for utilisation of ash fixed by Ministry of Environment, Forest and Climate Change. “Company may take measures to achieve norms fixed by CERC for gross station heat rate, auxiliary power consumption and specific fuel oil consumption, to make generation of power more economical Company may strengthen project monitoring mechanism and take time bound steps for imposition of penalty on defaulting contractors and award of contracts on risk purchase basis to prevent further time and cost overrun in the completion of its on-going projects,” said the CAG.

It also asked KBUNL to immediately put in place a fool proof mechanism to resolve the grade slippage issue of coal during transportation from loading to unloading points with the sampler and coal companies to ensure such losses do not occur in future.

“Company may place focus on its environmental commitments, ensure strict adherence to environmental norms and prevent any damage to the habitat and ecology surrounding the plant,” said the CAG.

Source: psuwatch
Anand Gupta Editor - EQ Int'l Media Network