Maharashtra
CAG blames Maharashtra power distribution co for costly buys

Additional expenses of Rs 374.79 cr incurred between 2005 and 2008.

Our Bureau

Mumbai, Dec. 25

The Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has been buying power from outside the State when it could have made cheaper purchase from Central Government.

The distribution company had incurred additional expenditure of Rs 374.79 crore on purchase of power on short-term basis from 2005-08 as it did not avail to the full extent its allocation from the Central units, a report of Comptroller and Auditor General (Commercial) said.

In the last five years, MSEDCL has been buying power from outside the State so as to meet the shortfall here. It can purchase power from the Centre's stations, and a quota has been allocated. But the report says that the company has bought power from Power Trading Corporation at higher cost.

The report pointed that the average cost per unit (kWh) from Central units like NTPC and NPCIL ranged between Rs 0.85 and Rs 2.88 during 2005-08.

“MSEDCL purchased power from Power Trading Corporation at rates ranging between Rs 2.92 and Rs 5.18 per unit. The company did not periodically assess actual receipt of power against the allocation of power. The short drawal of power during 2005-08 was to the extent of 1,661.90 million units,” the report said.

Ms Sayantani Jafa, Accountant General (Commercial Audit) of Maharashtra, said the internal control systems in companies like MSEDCL need to be strengthened, while releasing the report at a press conference on Thursday.

The report also said that in the absence of penal clauses in contractual provisions, the MSEDCL had purchased power from costly sources resulting in financial outgo of Rs 31.38 crore.

The shortfall in supply of power increased from 9,908 MUs in 2003-04 to 19,092 MUs in 2007-08. The company could not meet the demand despite the costlier purchases and had to resort to load shedding.

Load shedding ranged between 2.5 and 15 hours against planned load shedding of one to 12 hours.