OVERVIEW

3.    146 paragraphs included in this report relate to the PSUs under the administrative control of the following Ministries/Departments of the Government of India:

The audit observations included in this report highlight deficiencies in the management of PSUs which resulted in serious financial implications. The irregularities pointed out are broadly of the following nature:

• Unproductive expenditure/imprudent investment and loss of interest, financing charges amounting to Rs.712.72 crore in 39 cases due to bad investments, pay and allowances of idle labour, injudicious import of components etc.
• Excess/irregular payment of Rs.289.95 crore in 12 cases was made to staff of the PSUs on account of ex gratia, bonus, salaries, wages, extending benefits in excess of norms etc.
• Avoidable expenditure of Rs.145.63 crore in 32 cases due to use of unproven technology, delay in installation of equipment, failure to ensure correct specification of material, import/procurement of spares at higher rates, detention of vessel beyond lay time, power factor surcharge, poor cash management, payment of demurrage, customs duty, excise duty etc.
• Loss of Rs.103.12 crore occurred in 24 cases on account of undue favour to parties, defective agreement/contract terms, unrealistic feasibility study, wrong estimates, failure to obtain bank guarantee, delay in award of work, failure to make counter offer, failure to take financial safeguards, forfeiture of earnest money deposit etc.
• Loss of revenue/sale proceeds of Rs.68.82 crore in 18 cases due to delay in realisation/non-realisation of debts, purchase without working out parity calculations, unnecessary borrowings, manufacture of machines without order, unwarranted restriction on production, loss of generation of power premature deal to sell an aircraft non recovery of lease rentals etc.
• Avoidable loss of Rs.56.66 crore in 11 cases due to delay in finalisation of tenders, failure to invoke risk clause, non compliance of terms of the contract, non-adherence to delivery schedule, finalisation of contract documents without clients approval etc.
• Loss of Rs.29.27 crore in 10 cases due to adoption of incorrect tariff, excess settlement of claims, non-realisation of royalty etc.

II.    Highlights

Gist of some of the important paragraphs included in the Report is as follows:

• Indian Rare Earths Limited incurred infructuous expenditure of Rs.8.02 crore contrary to the technical recommendations during 1997-98 to 1999-2000 on major repairs of a sick plant.

(Para 2.1.1)

• Unnecessary borrowings by the Airports Authority of India (AAI) resulted in interest loss of Rs.10.35 crore during the period April 1995 to March 2001.

(Para 4.1.1)

• By allotting space at lower rate in October 1998 and allowing the same licencee to occupy adjacent land without claiming any licence fee, AAI had to forgo revenue of Rs.6.07 crore upto March 2002.

(Para 4.1.2)

• Under billing of electricity charges by the AAI resulted in loss of Rs.3.80 crore during 1997-98 to 1999-2000.

(Para 4.1.3)

• By allotting space at a lower rate during February 1999 and allowing the same licencee to illegally occupy adjacent land, that too without payment of any licence fee, AAI had to forego revenue of Rs.2.17 crore upto March 2001.

(Para 4.1.4)

• Indian Airlines Limited (IAL) incurred a loss of Rs.4.83 crore during the year 2000 due to its premature deal for delivering an aircraft to the buyer.

(Para 4.2.1)

• IAL failed to provide satisfactory ground handling services to Oman Air resulting in loss of revenue of Rs.1.50 crore from August 2000 to September 2001.

(Para 4.2.2)

• Bharat Coking Coal Limited (BCCL) failed to maintain the guaranteed ash content in the washed coal as per MOU with SAIL and suffered a loss of Rs.17.28 crore by way of despatch of coal above the guaranteed ash content during 1998-99 to 2001-2002.

(Para 5.1.1)

• BCCL constructed 852 quarters in October 1996 at a cost of Rs.13.87 crore for shifting/rehabilitating workers from one area earmarked for mining but the quarters remained un-occupied till date (August 2002).

(Para 5.1.2)

• Coal received from the Moonidih mines of BCCL was found to be below the declared grade based on analysis at washery end. As the declared grade was neither revised nor the grade slippage arrested resulting in avoidable payment of royalty of Rs.5.30 crore during 1997-98 to 2001-2002.

(Para 5.1.3)

• BCCL commenced a project for extraction of cooking coal from an already developed area by underground mines without obtaining the statutory permission from the Director General of Mines Safety. As the permission was not granted the expenditure of Rs.3.87 crore incurred on the project (January 1997 till its suspension in June 1999) towards clearance of overburden became infructuous.

(Para 5.1.4)

• For rehabilitation of families from critically endangered areas, as well as to shift workers from coal bearing area, BCCL hired quarters from Fertilizer Corporation of India Limited. The quarters were repaired by BCCL but could not either be occupied or the occupation was delayed which resulted in wasteful expenditure of Rs.1.04 crore in payment of idle lease rent from January 1996 to March 2002.

(Para 5.1.5)

• The integrated Piparwar mining and coal beneficiation project of Central Coalfields Limited became operational from 1997-98. However, since the railway siding scheduled for completion in March 1993 has not yet been commissioned, the rapid loading system completed in April 1997 could not be put to use. Consequently the investment on these facilities amounting to Rs.92.32 crore has yielded no benefit besides CCL absorbing recurring unrecovered portion on transport of coal by road.

(Para 5.2.1)

• Due to delay in taking suitable action to improve power factor at prescribed level, CCL paid surcharge of Rs.1.60 crore from 1995 to 2001.

(Para 5.2.2)

• An uninsured Dumper truck of Eastern Coalfields Limited, caught fire in March 2000 and was severely damaged. The Director General of Mines Safety inquiry pointed to improper maintenance of the equipment and lack of proper training to operating people. In February 2002 the Management incurred extra expenditure of Rs.2.39 crore on procurement of spares for repairing of the Dumper.

(Para 5.3.1)

• Neyveli Lignite Corporation Limited (NLC) relaid 2 km. stretch of its railway siding during March 1996 to December 1997 without synchronising it with gauge conversion work of Southern Railway. This did not yield any benefit to NLC and resulted in an infructuous expenditure of Rs.3.17 crore.

(Para 5.4.1)

• NLC made inaccurate estimates of its income during the financial years 1997-98 and 2000-01 which resulted in short payment of advance tax under Income Tax Act, 1961 and avoidable payment of interest of Rs.2.76 crore.

(Para 5.4.2)

• NLC suffered a loss of Rs.2.58 crore during 1998-99 due to under insurance of its assets in the Process Steam Plant.

(Para 5.4.3)

• Due to non-recovery of electricity charges from its employees in contravention of the terms and conditions of the Wage Agreement, South Eastern Coalfields Limited suffered a loss of Rs.219.77 crore during the period from April 1999 to March 2002.

(Para 5.5.1)

• Irregular payment of Rs.3.92 crore was made by the India Trade Promotion Orgnisation to its employees from 1996-97 to 2001-02 under an incentive scheme without prior approval of Government.

(Para 6.1.1)

• MMTC Limited (MMTC) incurred an avoidable loss of Rs.5.28 crore due to purchase of soya seed without working out parity calculations/ignoring negative parity during the year 1998-99.

(Para 6.2.1)

• During the currency of a valid agreement for obtaining supply of coal of superior quality at a lower rate, MMTC entered into another agreement in June 2000 with the same supplier for coal supply of lower quality at a higher rate, resulting in an extra expenditure of Rs.2.63 crore.

(Para 6.2.2)

• The State trading Corporation of India Limited (STC) made payment of Rs.5.49 crore during the period from 1992-93 to 1999-2000 as ex gratia to its employees in gross violation of the Payment of Bonus Act and instructions of the Government of India.

(Para 6.4.1)

• Construction of a warehouse by STC in April 2000 at Kakinada Port despite a downward trend in trading activities resulted in an infructuous expenditure of Rs.5.11 crore.

(Para 6.4.2)

• STC ignored the opinion of an expert agency, and invested Rs.2.15 crore in two aquaculture projects leading to loss of the entire investment during October 2001.

(Para 6.4.3)

• STC incorrectly applied voluntary retirement scheme guidelines during 1 to 15 February 2001 which resulted in excess payment of Rs.1.17 crore.

(Para 6.4.4)

• Failure to monitor the quality of coffee procured through an associate resulted in export of sub standard coffee in July/August 2000 with consequential loss of Rs.1.21 crore to STC.

(Para 6.4.5)

• Inordinate delay in submission of bills under Mid-Day-Meal Scheme by Food Corporation of India (FCI) led to an avoidable charges of Rs.35.86 crore on food subsidy during the period August 1995 to July 2001.

(Para 7.1.1)

• Excess burden of subsidy to GOI amounting to Rs.3.64 crore for the year 1999-2000 to 2000-01 due to short accountal of storage gain in Punjab Region of FCI.

(Para 7.1.2)

• FCI incurred infructuous payment of Rs.1.77 crore during April 1999 to December 2000 due to delay in surrendering leased land.

(Para 7.1.3)

• Bharat Earth Movers Limited (BEML) and its subsidiary Vigyan Industries Limited (VIL) included inadmissible items as part of ‘emoluments’ and applied incorrect formula for the payment of ex-gratia under voluntary retirement scheme. This resulted in an extra expenditure of Rs.13.52 crore. (BEML Rs.13.35 crore and VIL Rs.17 lakh) from 1992-93 to 2001-02.

(Para 8.2.1)

• Irregular accountal of sales by Bharat Electronics Limited resulted in premature payment of sales tax and income tax and consequent loss of interest of Rs.3.66 crore during 1999-2001.

(Para 8.3.1)

• National Fertilizers Limited (NFL) failed to follow the system of counter offer to match the lowest price earlier resulted in extra expenditure of Rs.2.82 crore on purchases of 981 lakh bags during August 1999 to October 2000.

(Para 10.2.1)

• Injudicious purchase of a premise at Bhopal by NFL without assessing its requirement resulted in blocking of Rs.93.31 lakh and loss of interest of Rs.1.20 crore for the period from January 19991 to December 2001.

(Para 10.2.2)

• The investment of Rs.44.91 crore on setting up of Formic Acid Plant in September 1998 by Rashtriya Chemicals and Fertilizers Limited was rendered wasteful due to poor implementation of project, lack of market demand and high cost of production.

(Para 10.3.1)

• The New India Assurance Company Limited suffered loss of premium of Rs.3.61 crore due to its failure to load premium for adverse claim ratio on policies issued to Videocon group of companies between February 2000 and March 2002, according to the policy guidelines.

(Para 11.1.1)

• The Oriental Insurance Company Limited incurred a loss of Rs.8.57 crore due allowing of excess group discount on Mediclaim policy issued to LIC from April 2001 to March 2002 in violation of guidelines for Group Mediclaim policies.

(Para 11.2.1)

• United India Insurance Company Limited (UIIC) failed to charge prescribed rates for Group Personal Accident Policy issued to Andhra Bank customers between November 1996 and October 2000 and suffered loss of revenue of Rs.4.49 crore.

(Para 11.3.1)

• UIIC suffered loss of Rs.3.16 crore due to short collection of premium in three cases during the period 1997-98 to 2001-02.

(Para 11.3.2)

• UIIC could not recover premium for the period 1997-98 to 1998-99 from Madras Fertilizers Limited resulting in loss of revenue of Rs.1.84 crore.

(Para 11.3.3)

• Without ascertaining its actual requirement before placement of order, Cement Corporation of India Limited (CCI) procured a DG set in August 1996 which remained unutilised resulting in avoidable expenditure of Rs.16.71 crore.

(Para 13.1.1)

• Due to hiring transportation at very high rates without inviting open tenders, CCI incurred an avoidable extra expenditure of Rs.3.05 crore during August 1996 to August 1999.

(Para 13.1.2)

• Bharat Heavy Electricals Limited (BHEL) supplied locos to Railways and was required to keep the same in working condition during the warranty period. As BHEL failed to fulfil its warranty obligations, it could not recover lease rentals of Rs. 6.82 crore during 1997-98 to 2001-02.

(Para 13.2.1)

• BHEL had imported material during 1999-2000 and 2000-2001 without any ‘Notice to Proceed’ or supply order resulting in locking of Rs.6.27 crore.

(Para 13.2.2)

• BHEL applied incorrect rate of sales tax on the supplies in March 1998 and subsequently paid Rs.5.06 crore during December 1998 to March 2000 to Tax Authorities under protest.

(Para 13.2.3)

• Due to unrealistic estimates and also delay in supply of pressure vessels in May 1996, BHEL suffered an avoidable loss of Rs.5.03 crore.

(Para 13.2.4)

• Due to delayed execution of the contract by 14 months to 26 months and non-compliance of other terms and conditions of the contract BHEL incurred loss of Rs.4.07 crore in March 2001.

(Para 13.2.5)

• BHEL accepted in July 1994 a contract under deemed export benefits which were not actually available and also delayed its supplies by 38 months in February 1999 resulting in an avoidable loss of Rs.4.03 crore on account of payment of excise duty and liquidated damages.

(Para 13.2.6)

• Due to non-adherence of delivery schedule with a delay of 16 months to 30 months and also non-compliance of other terms and conditions of the contract, BHEL incurred a loss of Rs.2.88 crore on account of payment of excise duty and price reduction by the customer.

(Para 13.2.7)

• BHEL accepted an order from a private party on firm price basis without finalising the design and engineering details. It incurred extra expenditure (March 1999) due to increase in quantities owing to change in design, which was not recoverable from the party. Resultantly, it had to bear a loss of Rs.2.78 crore on the contract.

(Para 13.2.8)

• BHEL failed to include a suitable clause in the contract for reimbursement of excise duty on design and engineering services and as such suffered loss of Rs.1.89 crore during 1997-98 to 1999-2000.

(Para 13.2.9)

• BHEL failed to place the order for procurement of imported material and consequently hand over the same in time to the subcontractor for fabrication of dished ends. This resulted in unfruitful expenditure of Rs.1.77 crore due to cancellation of the order by the contractor during 1998-99 to 1999-2000.

(Para 13.2.10)

• BHEL had not assessed the techno-economic viability of the Closed Die Forging Shop (CDFS) in the feasibility report in terms of the cost effectiveness. As a result, the CDFS has not been operated since 1995-96 resulting in an infructuous expenditure of Rs.1.53 crore.

(Para 13.2.11)

• Heavy Engineering Corporation Limited (HEC) started manufacture of equipment on the basis of letter of intent without awaiting formal order, approval of drawings and receipt of advance from the client and incurred expenditure of Rs.6.73 crore upto March 2000 which was taken by the purchaser on account of its poor financial health. HEC also could not sell this equipment to alternate customers resulting in blockade of funds to this extent.

(Para 13.3.1)

• Due to non-adherence to the established marketing guidelines, Hindustan Paper Corporation Limited suffered a loss of Rs.3.69 crore due to non realisation of the sale proceeds for the period from August 1997 to March 2000.

(Para 13.4.1)

• HMT Limited incurred loss of Rs.1.03 crore between November 1996 and August 1999 due to failure to execute order as per delivery schedule besides blocking of funds of Rs. 23.19 lakh as of July 2002.

(Para 13.5.1)

• Injudicious procurement of Continuous Sand Mixer and Sand Reclamation Plant by HMT Machine Tools Limited in October 1998 resulted in wasteful expenditure of Rs.1.23 crore.

(Para 13.6.1)

• Failure of Semi Conductor Complex Limited in taking a decision either to utilise or dispose off the land purchased in 1989 resulted in blocking of Rs.2.10 crore for over ten years and loss of interest of Rs.2.67 crore from February 1988 to June 2002.

(Para 14.2.1)

• National Aluminium Company Limited incurred unfruitful expenditure of Rs.12.76 crore due to premature procurement of belts on the recommendation of the supplier during the period from August 1995 to September 1996.

(Para 15.1.1)

• By allowing two conflicting kind of provisions in a sale transaction during the year 1998-99, NALCO could not recover Rs.1.44 crore from a party.

(Para 15.1.2)

• Indian Renewable Energy Development Agency Limited entered into loan agreement based on unrealistic projections. This resulted in avoidable payment of commitment charges of Rs.7.90 crore till March 2002 and recurring annual expenditure of Rs.1.89 crore.

(Para 16.1.1)

• Despite withdrawal of Administered Price Mechanism by the Government of India, w.e.f 1 April 1998, due to which the proposed LPG bottling Plant would not remain viable the Bongaigaon Refinery and Petrochemicals Limited (BRPL) completed its construction in October 2000 which led to idle investment of Rs.23.52 crore.

(Para 17.1.1)

• BRPL incurred unfruitful expenditure of Rs.2.37 crore due to non implementation of two new technologies purchased by them during the year 1995-96 without reviewing their viability on realistic basis.

(Para 17.1.2)

• Bharat Petroleum Corporation Limited (BPCL) failed to take adequate measures to protect its underground optical fibre cable which resulted in scrapping of the Telecommunication System in 2001-02 and infructuous expenditure of Rs.3.89 crore.

(Para 17.2.1)

• BPCL sold its products on credit to a customer without any security or execution of agreement leading to loss of sales revenue from November 1998 to April 1999 amounting to Rs.1.70 crore.

(Para 17.2.2)

• Failure of the Hindustan Petroleum Corporation Limited to utilise newly-constructed black oil pipeline from Mumbai Refinery to Vashi resulted in infructuous expenditure of Rs.42.30 crore from April 1998 to March 2001.

(Para 17.4.1)

• HPCL delayed surrendering land that had been rendered surplus after shifting the LPG plant from Shakurbasti. This resulted in avoidable expenditure of Rs.10.93 crore on lease rent for the period from April 1994 to October 2001.

(Para 17.4.2)

• HPCL failed to either dispose off the material or store it properly resulted in loss of Rs.1.33 crore during August 1997 to March 2002.

(Para 17.4.3)

• The failure of HPCL to ensure the incorporation of correct specification of the material to be used in manufacture of Trim Cooler resulted in avoidable extra expenditure of Rs.1.22 crore during February 1997 to March 2001.

(Para 17.4.4)

• IBP Co. Limited constructed two floating roof tanks in 1993 at a cost of Rs.1.16 crore which remained unutilised for last nine years (July 2002).

(Para 17.5.1)

• Investment of Rs.36.44 crore by Indian Oil Corporation Limited (IOC) on setting up of propylene separation unit at Panipat in August 2000, went waste due to flawed estimates/assumptions and failure to review the project in time.

(Para 17.6.1)

• IOC constructed in September 2001 a terminal at a cost of Rs.31.07 crore to supply fuel to Independent Power Producers without waiting for their financial closure. This resulted in facilities remaining idle.

(Para 17.6.2)

• The decision of the IOC to acquire residential accommodation for officers at Kolkata without a realistic assessment of future demand resulted in the blocking of funds of Rs.5.60 crore since September 1995.

(Para 17.6.3)

• Improper deployment of staff at IOC Delhi LPG Bottling Plant, and excessive payment of overtime allowance, despite having surplus manpower resulted in unproductive recurring expenditure of Rs.2.91 crore per annum.

(Para 17.6.4)

• IOC supplied High Speed Diesel (HSD) between July 1996 and December 1998 from storage points in Kerala to customers in Tamilnadu and made an avoidable payment of irrecoverable excise duty of Rs.1.65 crore.

(Para 17.6.5)

• Failure of IOC to nominate vessels for upliftment of High Speed Diesel from Kuwait when nominated vessel was held up due to a cyclone at Kandla port resulted in extra expenditure of Rs.1.45 crore in May 2001.

(Para 17.6.6)

• Oil and Natural Gas Corporation Limited (ONGC) after opening the bids for gas compression services decided to re-tender the work without advance payment clause despite the recommendations of the Executive Director (WRBC) to honour the original NIT. The delay in re-invitation of tenders resulted in further flaring of gas to the extent of Rs.45.08 crore between October 1998 and May 2001.

(Para 17.7.1)

• ONGC took up the two Coal Bed Methane exploratory wells for drilling in 1995-96 in Durgapur area, the expenditure of Rs.26.36 crore made until September 1997 was rendered infructuous due to poor cementation.

(Para 17.7.2)

• For replacing the conventional logging with Electro-logging equipment (a new technology) in two wild-cat exploratory wells, ONGC mobilised the equipment in June 1998. Due to non-availability of scope of work in identified wells, the equipment was finally used, as a fait accompli, in various other wells before demobilisation. This resulted in avoidable loss of Rs.26.03 crore as the data obtained was not found useful.

(Para 17.7.3)

• Due to early deployment of operation and maintenance personnel before the sailing of drillship, ONGC incurred extra expenditure of Rs.2.25 crore from 29 December 1997 to 9 February 1998.

(Para 17.7.4)

• ONGC imported spare parts from May 1999 to June 1999 for its drillships without availing exemption from payment of custom duty which resulted in avoidable expenditure of Rs.1.25 crore.

(Para 17.7.5)

• ONGC suffered a loss of Rs.1.21 crore due to implementation of unproven and untested technology during March 1999 to August 2000. The project had to be eventually abandoned, as it was operationally unviable.

(Para 17.7.6)

• Failure to award job of procurement and fitting of the propeller blades to a registered ship repair unit by ONGC led to avoidable payment of customs duty amounting to Rs.1.10 crore during September 1998 to August 1999.

(Para 17.7.7)

• Delay in finalisation of tender and extension to the existing contracts at the same rates by ONGC resulted in an extra expenditure of Rs.1.06 crore for the period from July 1998 to April 1999.

(Para 17.7.8)

• Nathpa Jhakri Power Corporation Limited and Himachal Pradesh State Electricity Board as well as other agencies of the GOI failed in detecting the mistakes in the computation of the capacity of reservoir of Nathpa Jhakri Project, before submitting the DPR for the approval of the GOI and later before commencing the execution of the work. As a result, the peaking availability of power during lean season would now be 1.5 hours against 3 hours as planned earlier. This would lead to a generation loss of 713 million units per annum.

(Para 18.1.1)

• By failing to take due care at the time of finalisation of the Memorandum of Understanding for recovering TDS from the contractor, National Hydroelectric Power Corporation Limited (NHPC) has not realised funds amounting to Rs.7.41 crore for more than eight years (May 2002).

(Para 18.2.1)

• NHPC did not restrict the payment of customs duty in proportion to the actual cost of the imported equipment. This resulted in an extra payment of Rs.2.87 crore to the contractor during November 1999 to June 2001.

(Para 18.2.2)

• Due to its failure in monitoring the progress of the generation project, Power Grid Corporation of India Limited (PGCIL) constructed the transmission system, 45 months in advance of its requirement. As a result PGCIL had to bear loss of Rs.26.44 crore on account of the interest, operation and maintenance expenditure till March 2002. Besides, PGCIL was also not able to earn annual revenue of Rs.36.74 crore since April 2000.

(Para 18.3.1)

• PGCIL did not take cognisance of the lower rate to explore the possibility of reduction in rates before placing the letters of award for Kishenpur-Moga transmission system in January 1995. As a result, it had foregone an opportunity to save extra expenditure to the extent of Rs 28.69 crore.

(Para 18.3.2)

• Due to delay in cancellation of the unutilised foreign exchange loan coupled with premature withdrawal of loan, PGCIL incurred avoidable burden of Rs.5.98 crore on account of finance charges from March 1993 to July 2001.

(Para 18.3.3)

• Non-adjustment of advance paid to M/s. Technopromexport by Tehri Hydro Development Corporation Limited against the liability transferred to PGCIL resulted in blocking of Rs.2.78 crore since August 1993.

(Para 18.4.1)

• Due to failure in ascertaining the availability of requisite wagons at selected places, IRCON International Limited had to incur an avoidable extra expenditure of Rs.1.68 crore on retransportation of sleepers upto April 2002.

(Para 19.1.1)

• Delay in collection of toll in the Gurgaon-Kotputli section of National Highway No.8 by National Highways Authority of India (NHAI) had resulted in a loss of revenue of Rs.8.76 crore from 1 January 2002 upto 14 March 2002.

(Para 20.1.1)

• Failure of the NHAI to recover extra cost from a contractor on re-awarding of work necessitated due to fault of the contractor resulted in a loss of Rs.4.95 crore in March 2001.

(Para 20.1.2)

• Irregular payment of royalty by NHAI to the contractor resulted in an excess payment amounting to Rs.4.47 crore from July 1997 upto March 2001.

(Para 20.1.3)

• Central Inland Water Transport Corporation Limited suffered a loss of Rs.1.55 crore in October 2001 due to sale of its three attached vessels by EPFO by auctioning them at a reserve price fixed at their scrap value instead of reusable.

(Para 21.1.1)

• Poor judgement in assessing business potential by The National Small Industries Corporation Limited before setting up offices abroad resulted in infructuous expenditure of Rs.2.35 crore upto March 2002.

(Para 22.1.1)

• Kudremukh Iron Ore Company Limited (KIOCL) along with two other public sector undertakings floated a joint venture company (JVC) in June 1995 to manufacture low sulphur low phosphorus pig iron and ductile iron spun pipes. Even though KIOCL has contributed Rs.50 crore as equity in the JVC, shares upto the value of contribution have not been allotted by the JVC to KIOCL to keep activities of JVC outside the scope of parliamentary control. Despite the fact that the JVC was not doing well and against specific directions of the Government, KIOCL continued to support the JVC with concessional loans which amounted to Rs.227.50 crore as on March 2002 resulting in loss of interest amounting to Rs.24.23 crore.

(Para 23.1.1)

• MECON (I) Limited (MECON) incurred a loss of Rs.1.77 crore during the period 1993-94 to 1998-99 in a project on account of faulty preparation of estimates and incurring expenditure even after completion of the work.

(Para 23.2.1)

• MECON incurred expenditure of Rs.1.23 crore during 1999-2000 on preparation of tender documents without getting the approval of the client for change in the consortium, which was pre-qualified for the work. The expenditure was wasted as MECON could not derive any benefit therefrom.

(Para 23.2.2)

• Due to entering into a contract with a private party without adequate financial safeguard against non-performance of the contract, Metal Scrap Trade Corporation Limited sustained a loss of Rs.2.56 crore in the import and sale of furnace oil during the year 1998-99.

(Para 23.3.1)

• Due to acceptance of incorrect tariff for colony consumption, National Mineral Development Corporation Limited incurred an avoidable extra payment of Rs.1.73 crore for the period from July 1997 to May 2001.

(Para 23.4.1)

• Rashtriya Ispat Nigam Limited (RINL) incurred a loss of revenue of Rs.9.17 crore on account of unwanted restriction of production of hot metal during June 1998 to March 1999.

(Para 23.5.1)

• As against the minimum required deposit, RINL deposited amounts in excess with APSEB, which, resulted additional interest burden of Rs.3.93 crore during the period from 1995-96 to 2001-2002.

(Para 23.5.2)

• By waiving red clause and EMD, RINL improperly awarded a contract in December 1999 to a foreign firm, which did not fulfil its commitment and as such suffered a loss of Rs.3.07 crore.

(Para 23.5.3)

• Without ascertaining the extra cost involved, RINL shifted its stock yard at Delhi from Badarpur to Nangloi which resulted in avoidable extra expenditure of Rs.2.89 crore during the period from January 1997 to June 2000.

(Para 23.5.4)

• Due to delay in nomination of a senior official by the Ministry and resultant delay in commencement of price negotiation, Steel Authority of India Limited (SAIL) had to settle for higher rates for the delivery of home coking coal during July 2000 to June 2001, resulting in a loss of Rs.27.68 crore.

(Para 23.6.1)

• Delay in taking decision by SAIL regarding relaxing specification of soft coking coal resulted in avoidable loss of Rs.12.18 crore during 2001-2002.

(Para 23.6.2)

• SAIL incurred expenditure of Rs.7.39 crore upto July 1998 on a boiler which could not be completed by the contractor, with no possibility of a solution in future.

(Para 23.6.3)

• SAIL extended unsecured credit to a customer in violation of credit policy which resulted in non realisation of Rs.3.76 crore which included interest of Rs.2 crore as on 31 March 2002.

(Para 23.6.4)

• SAIL granted repeated extensions during 1999-2000 to a party inspite of being aware that the latter was incurring financial losses in the past two years. This has resulted in loss of Rs.1.99 crore.

(Para 23.6.5)

• Due to poor cash management SAIL could not honour Credit Note-cum-Cheque issued during 1999-2000 to Railways which resulted in levy of surcharge amounting to Rs.1.70 crore.

(Para 23.6.6)