Audit Reports

Tamil Nadu

Overview

Performance Audit on Coal Management in Thermal Power Stations of Tamil Nadu Generation and Distribution Corporation Limited

Against linkage of 106.97 Million Metric Tonnes (MMT), TANGEDCO could secure receipt of 71.82 MMT of coal during 2014–19.  Even though TANGEDCO resorted to procurement of 22.76 MMT of imported coal to offset the short supply, it did not levy any penalty for short supply from CIL.

CIL requested (June 2016) TANGEDCO to stop importing coal and substitute it with high grade indigenous coal available from its sources.  However, coal supplied under import substitution scheme was to the extent of 31 per cent of agreed quantity. But, TANGEDCO did not prefer any claim of penalty with the coal companies as per clause 3 of FSA for the short supply. 

GOI introduced (June 2016) a scheme of “Flexibility in utilisation of domestic coal for reducing the cost of power generation” which provided for consolidation of Annual Contracted Quantity of coal of all TPS within the State.  Due to non-inclusion of coal allotment made for one of the Joint Venture power company i.e., NTECL which is having TPS within the State, TANGEDCO lost the central allocation of coal to the extent of 6.239 MMTPA.

TANGEDCO allowed its JV partner NTPC Tamil Nadu Energy Company Limited (NTECL) to use its own coal terminal without any commitment for upgradation of unloading facilities.  In the meantime, it used a private coal terminal for unloading of coal which resulted in avoidable extra expenditure of Rs.41.68 crore.

Even though TANGEDCO suffered excess transit loss over the norm of 1.50 per cent for the coal transported from North Chennai to Mettur by railways in 47 out of 60 months (78 per cent) valuing Rs.58.37 crore, it did not fix any accountability on the contractor for the loss.

Failure to load the coal up to the permissible carrying capacity of wagons resulted in idle freight charges of Rs.101.35 crore.

As against the normative loss of calorific value of 120 kcal/kg, the actual loss of calorific value during transportation from mines to discharge ports ranged between 140 to 2,256 kcal/kg resulting in wasteful expenditure of Rs. 2,012.65 crore.  Even though there were instances of drop in Gross Calorific Value (GCV) during consumption immediately upon its receipt on the same day, TANGEDCO had not analysed the reasons for the same.

The systems adopted by TANGEDCO for assessment of quality of coal was deficient as (i) at coal mines there was no mechanical sampling as prescribed by GOI which was continued to be carried out manually, (ii) TANGEDCO accepted 13.79 lakh MT of coal valuing Rs.411.63 crore without testing, (iii) the test results of samples to be received within 30 days were delayed beyond two to three months in case of MCL and more than one year in case of ECL, (iv) TANGEDCO used formula method for determination of calorific value though it was mandatory to use bomb calorimeter for testing, and (v) there was no coal Quality Monitoring Wing at Headquarters of TANGEDCO.

In five TPS studied in audit, the energy charges computed by TANGEDCO for billing were based on ‘As Fired GCV’ and higher by Rs.1,805.35 crore during 2014-19 compared to the energy charges to be billed based on ‘As Received GCV’ as per CEA/CERC recommendations.

The actual SHR was in excess of norm stipulated by TNERC in all TPS, which resulted in excess consumption of 56.85 lakh MT of coal valuing Rs.2,317.46 crore throughout 2014–19.  Moreover, TANGEDCO could not reduce specific coal consumption despite usage of higher proportion of imported coal having high calorific value in all TPS. 

TANGEDCO suffered generation loss of 844 MU valued at Rs.171.57 crore due to poor quality of coal during 2014–19.

TANGEDCO did not adhere to GOI guidelines for phasing out of accumulation of ash on land and had accumulated 62.15 MMT of ash in ash dykes in three TPS as on March 2019.  The continued dumping of ash on land resulted in contamination of ground water, Buckingham canal and Kosasthalaiyar river.

Compliance Audit Observations relating to Power Sector Undertakings

Non-levy of Parallel Operation Charges and start-up power charges from Captive Generating Plants resulted in loss of revenue Rs.22.91 crore and Rs.23.85 crore respectively.

Compliance Audit Observations relating to State PSUs (other than Power Sector)

Two PSUs viz., Tamil Nadu Cements Corporation Limited and Tamil Nadu Minerals Limited working under the administrative control of Industries Department of Government of Tamil Nadu disregarded the directives of Ministry of Environment and Forest, GoI and continued to mine limestone without obtaining Environmental Clearance which resulted in payment of penalty of Rs.57.72 crore and additional liability of Rs.2.77 crore.

Tamil Nadu Arasu Cable TV Corporation Limited paid Customs Duty to the vendors without obtaining the proof of actual payment and did not levy penalty for delayed supply which resulted in undue favour of Rs.37.43 crore.

TIDEL Park Limited extended undue benefit to the co-owners of the park to the extent of Rs.5.63 crore due to non-recovery of proportionate cost of replacement of plant and machinery.

Non-adherence to the disbursement procedures of loan by Tamil Nadu Industrial Investment Corporation Limited resulted in siphoning of Rs.1.07 crore by a loanee.

Download Audit Report

• Government of Tamil Nadu Report No. 2 of the year 2021 – Public Sector Undertakings Audit Report of the Comptroller and Auditor General of India for the year ended 31 March 2019
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• Excerpts from Chapter 2: Performance Audit on Coal Management in Thermal Power Stations of Tamil Nadu Generation and Distribution Corporation Limited
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