As on 31 March 2018, there were 26 PSUs in Chhattisgarh, including one Statutory Corporation and 25 Government companies (including three non-functional Government companies) under the audit jurisdiction of the Comptroller & Auditor General of India. The 18 PSUs covered in this report registered an annual turnover of Rs 28,802.99 crore as per their latest finalised accounts as on 31 December 2018. This turnover was equal to 9.87 per cent of Gross State Domestic Product (GSDP) for the year 2017-18 (Rs 2,91,681 crore).
This Report is divided into two parts. Part-I relating to Functioning and Performance of Power Sector Undertakings contains a performance audit involving financial effect of Rs 4,099.47 crore whereas Part-II relating to Functioning and Performance of State Public Sector Undertakings (other than Power Sector) contains three compliance audit paragraphs involving financial effect of Rs 13.52 crore.
Chapter 1 include function of Power Sector Undertakings. The Power Sector Undertakings registered a turnover of Rs 20,024.86 crore (i.e. 6.87 per cent of the GSDP of Chhattisgarh) during 2017-18. As on 31 March 2018, the total investment (equity and long term loans) in five power sector undertakings was Rs 20,103.80 crore (32.79 per cent towards equity and 67.21 per cent in long-term loans). The profit earned by power sector PSUs was Rs 64.82 crore in 2017-18 against losses of Rs 187.84 crore incurred in 2015-16. During the period between 2008-09 and 2011-12 (except during 2009-10) total earnings of the four power sector PSUs remained substantially below the minimum expected return towards the investment made by GoCG. Of the four Power Sector Undertakings, the net worth of (-) Rs 3,733.18 crore had fully eroded equity investment of Rs 2,263.10 crore and Government loan of Rs 86.42 crore in Chhattisgarh State Power Distribution Company Limited. The Return on Capital Employed (ROCE) improved from 6.63 per cent in 2015-16 to 11.77 per cent in 2017 -18 due to increase in earnings before interest and tax (EBIT). As regards achievement of operational targets under UDAY the performance was not satisfactory. The Aggregate Technical and Commercial (AT&C) loss of the State Discom was 19.07 per cent by 2017-18 against the target of 18 per cent. The quality of accounts of power sector PSUs needs improvement. Statutory Auditors have qualified all five accounts that were finalised between 1 January 2018 to 31 December 2018.
Chapter 2 includes a Performance Audit on “Construction and Operation of Atal Bihari Vajpayee Thermal Power Station, Marwa” of Chhattisgarh State Power Generation Company Limited. The Company acquired total 1,728.73 acre land, against limit of 1,254.76 acre resulted in increase in cost of project by Rs 63.32 crore. The Company executed two major contracts valuing Rs 3,890.62 crore relating to Boiler, Turbine and Generator (BTG- Main Plant) and Balance of Plant (BOP- Ancillary works) contracts on Engineering, Procurement and Construction (EPC) contract basis. Due to mismatch in specifications for in-motion Weigh Bridge, it could not be commissioned till (May 2019). Consequently, coal lost in transit against procured coal valuing Rs 1,681.52 crore could not be assessed during the period 2016-17 to 2018-19. The Company released Rs 276.75 crore as interest free advance towards supply of material and Rs 25.40 crore as interest free mobilisation advance for the work of erection, testing and commissioning to M/s BHEL. This resulted in extension of undue advantage to M/s BHEL and consequent loss of realisable interest of Rs 87.66 crore to the Company. Unit - 1 and 2 of the project were commissioned with a delay of 42 and 44 months respectively due to delay in execution of agreement, supply of material, awarding and completion of BTG civil works, awarding and completion of facilities under BOP contracts etc. The actual expenditure incurred by the Company on the project upto 31 March 2019 was Rs 8,892.51 crore against the original estimated cost of Rs 5,119.84 crore and the Company had to incur additional expenditure of Rs 3,772.67 crore due to increase in Interest during Construction (IDC) on loan, cost of Main and Ancillary Plant, cost of land acquisition and Rehabilitation and Resettlement expenditure etc. Even after commissioning of both the units of the Power Plant the Company failed to achieve the objective of generation of at least 850 MW per hour power (at 85 per cent Plant Load Factor) consequently there was shortfall in generation of 6,345.53 MUs power valuing Rs 1,713.29 crore Poor operational performance also resulted in consumption of fuel oil in excess of the prescribed norms - excess expenditure of Rs 47.72 crore, the station heat rate was higher than prescribed norms - excess consumption of 1.54 lakh MT coal valuing Rs 37.69 crore. The Company did not adhere to the provisions of various Acts, Regulations and norms prescribed by the Government of India and Chhattisgarh Environment Conservation Board (CECB) which may adversely impact the environment. Non-preparation of works manual, non-conducting of energy audit, deficient internal audit system, non-insurance of plant and deficient SAP-ERP system indicates lack of effective internal control and monitoring mechanism.
Chapter 3 include functioning of Public Sector Undertakings (other than Power Sector). Chhattisgarh had 21 State PSUs (other than Power Sector) consisting of 17 working companies, one working Statutory Corporation and three non-working PSUs (all companies). Of the 21 State PSUs, financial performance of 13 PSUs is covered in this report. These working PSUs registered a turnover of Rs 8,778.13 crore (i.e. 3.01 per cent of the GSDP of Chhattisgarh) during 2017-18. As on 31 March 2018, the total investment (equity and long term loans) in these 21 PSUs was Rs 1,021.54 crore (9.13 per cent towards equity and 90.87 per cent in long-term loans). The profit of Rs 120.76 crore earned by these functional PSUs in 2015-16 decreased to Rs 93.85 crore in 2017-18. Out of 13 PSUs, 10 PSUs earned profit of Rs 94.28 crore and three PSUs incurred losses of Rs 0.43 crore. During the period between 2008-09 and 2017-18, these companies earned substantial profits (except in 2012-13) to recover cost of funds infused by GoCG in these PSUs. The ROCE of the 13 State PSUs (other than Power Sector) decreased during the year 2016-17 and 2017-18 in comparison to that for the year 2015-16. The State Government has not formulated any dividend policy for State PSUs. Out of the nine State PSUs who had earned an aggregate profit of Rs 94.05 crore on the Government equity of Rs 44.28 crore, only Chhattisgarh Rajya Van Vikas Nigam Limited and Chhattisgarh State Warehousing Corporation proposed the dividend of Rs 2.41 crore. The quality of accounts of PSUs needs improvement. Statutory Auditors have qualified all the 14 accounts that were finalised during 1 January 2018 to 31 December 2018.
Chapter 4 includes three Paragraphs relating to Transaction Audit Observations. The irregularities pointed out are broadly resulted in loss of Rs 13.52 crore in three cases due to non-compliance with ineffective monitoring, non-compliance of directives and finalisation of tender at higher rate.