Fund mishandling: CAG raps Karnataka Neeravari Nigam Limited

Bengaluru: The CAG has rapped the Karnataka Neeravari Nigam Limited (KNNL) and the power sector for mishandling accounts, which had left the government poorer by Rs 1685.38 crore.

While reviewing the functioning of PSUs in the state, the CAG observed that while organisations like KRIDCL made profit, KNN, HESCOM and GESCOM incurred huge losses, which were avoidable. Taking a dig at RTPS, the CAG observed that the performance of unit-8 was sub-optimal up to 2014-15 and shortfall in generation during this period was 4077 mu. The loss of generation due to failure of equipment was 3856.78 MU. The management could have avoided much of the loss due to failure of equipment, it said.

Besides, the unit could not achieve 100 per cent disposal of fly ash and did not comply with guidelines of MoEF. The Ash Pond, meant for only bottom ash was filled with fly ash too, the CAG noted.

The CAG pointed out that the PSUs had made undue favours to contractors amounting to Rs 21.95 crore, while miscellaneous cases of misappropriation amounted to Rs 141.22 crore. The highlights of the CAG report include KNNL paying weightage of 25 per cent as incentive to contractors violating tender conditions, benefiting contractors to the tune of Rs 11.11 crore. It also paid an additional Rs 1.24 crore for not monitoring the power factor.

The KNNL did not avail auto-sweep facility from its bank for funds in its current account, losing interest of Rs 1.16 crore. Meanwhile, KRDCL did not hand over land for construction of a road from Kudligi-Sandur to Torangal, and paid an avoidable compensation of Rs 35.20 crore. KPCL procured spares for its DG plants, though it was aware of the fact that it was switching over to gas plants. The spares worth Rs 5.04 crore had to be written off.

The MPM has been referred to BIFR, and has shifted its administrative office to Bhadravati. However, a large office for only six officers was retained in Bengaluru, incurring unavoidable expenditure of Rs 1.16 crore, CAG noted.


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