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Home News Power Sector News BRPL got undue loan, did not pay penalty on default - CAG

BRPL got undue loan, did not pay penalty on default - CAG

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CAGThe CAG report has also dug up dirt in the Delhi power sector. It alleges that the government favoured Reliance-backed BSES Rajdhani (BRPL) not only while granting it a loan under the power stabilization fund (PSF) but also by not charging penal interest of Rs 3.67 crore when BRPL failed to repay the loan on time. The report takes Delhi Transco Ltd to task for not imposing a penalty of Rs 80.91 lakh on a contractor for delay in completion of work, and states that Indraprastha Power Generation Company Ltd ( IPGCL) suffered a loss of Rs 22.64 lakh due to delay in awarding a contract for sale and lifting of fly-ash.

 The report states that deficiencies were noted in the use of PSF by the holding company Delhi Power Company Ltd (DPCL). Under the rules, PSF funds could be loaned to distribution companies Tata Delhi Power, BRPL and BYPL in the ratio of 29.18%, 43.58% and 27.24%. "It was, however, observed that DPCL...gave the entire short term loan of Rs 400 crore to only BSES Rajdhani,'' says the report. While the loan tenure was capped at one year, BRPL was given an extension after it defaulted. Also, it was not charged penal interest at the rate of 2.75% for eight months. As a result, "DPCL faced a financial crunch,'' the report says. The interest lost amounted to Rs 3.67 crore. "The government stated that they cannot charge interest as it would affect consumers (sic)."

Delhi Transco also failed to penalize a slow contractor, the report notes. M/s Kamal Builders was awarded a contract worth Rs 838.25 lakh for supply and filling of fly ash and earth at the Mundka sub-station. The work was to be completed in six months. However, the contractor was given extensions first on December 22, 2008 and then on March 26, 2009. Although the contract allowed for a penalty at the rate of 1% of the awarded value for each day, "On both occasions, the contractor was not penalized for the delay and undue benefit was given by not imposing penalty of Rs 80.81 lakh".

The report faults Indraprastha Power Generation Company Ltd (IPGCL) for delay in awarding a contract for sale and lifting of fly-ash. The company took six months just to decide and start the process for inviting bids. Although approval was accorded on March 26, 2009, tenders were invited in September 2009 and the contract was finally awarded on October 23, 2009. "Due to delay in decision making and finalization of tender and contract, the company lost the opportunity to earn additional revenue of Rs 22.68 lakh," says the report.

Source- TOI


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