CAG raps PGCIL for shoddy infra planning; non-collection of Rs 6853 cr charges

NEW DELHI: The Comptroller and Auditor General of India has rapped the country’s transmission utility Power Grid Corp for shoddy planning of infrastructure and non-collection of Rs 6,853 crore relinquishment charges from power companies that surrendered transmission access.
In its audit findings CAG said that no network plan was found available in the records or on the website of the central transmission utlitiy, Power Grid Corp.

As per the guidelines issued by the Ministry of Power this network plan is required to include projects for new transmission lines and substations and strengthening and upgradation of existing lines.

“In the absence of network plan, a structured mechanism for timely dissemination of the likely additions/ modifications to the transmission system to stakeholders, and for assessing and focusing on the requirement for upgradation of the existing lines in advance was not available,” the audit said.

It said as per regulations, a long-term customer may relinquish the long-term access rights fully or partly before the expiry of the full term of Long-Term Access (LTA) by making payment of compensation for stranded capacity.

A total 26,836 MW of LTA were surrendered by the customers from September 2010 to March 2018. However, no relinquishment charges had been collected from the customers till date. “As a result, an amount of Rs 6,853.43 crore is yet to be recovered from the relinquished customers. Hence, due to non-collection of compensation charges by PGCIL for stranded capacity, consumers are being put under extra financial burden,” it said. The Appellate Tribunal for Electricity (Aptel) has stayed collection of relinquishment charges by Power Grid Corp.

The audit report also pointed at mismatch in planning transmission lines for evacuation of power from generation projects. As per Regulations of Central Electricity Regulatory Commission (CERC), transmission system associated with a generation project should precede the date of commercial operation of the generating station at least by six months.

CAG said of eight generation-linked transmission projects selected in audit that were completed till July 2018, there was delay in commissioning of six transmission systems associated with generation projects in the states of Chhattisgarh, West Bengal and Odisha due to which there was congestion in evacuation of power. Also, interim arrangements had to be made for 21 to 56 months to evacuate the power produced by five generating stations.

The auditor said in the absence of a network plan, PGCIL had not prepared any separate plan for upgradation of the existing system. During 2012-17, while the company commissioned 233 new lines, upgradation was carried out to only eight lines.

The report said of 18 projects selected for audit, only two projects were completed within scheduled time and 13 projects were completed with delays ranging from 4 to 71 months. Remaining three projects were under execution with anticipated delays ranging from 6 to 109 months in completion. The main reasons for delay in projects were delay in submission of proposals for forest clearance, delay in providing site by PGCIL, delay in supply of quantity clearance by PGCIL and delay in finalising amendment in LOA, which could have been controlled by better project management. Due to delay in completion of projects within prescribed CERC timelines, PGCIL also lost the opportunity of earning Rs 112.51 crore towards additional Return on Equity as part of tariff, it said.

It also said the company had not devised any mechanism for assessing the utilisation of the completed and commissioned transmission lines. The audit found that peak/ maximum power flows in 18 out of 30 lines (60%) remained below 40% of their respective maximum load ability during the period from their inception to March 2019.