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Extra financial burden on consumers due to PGCIL's inefficiency: CAG

<p id="content">In a scathing attack on inefficient operations of state transmission utility Power Grid Corporation of India, the official auditor Comptroller and Auditor General (CAG) has put the blame of higher electricity tariff on PSUs inability to recover Rs 6,853.43 crore from customers for relinquishing long-term access (LTA) to the transmission network.</p>
According to the CAG report on planning and implementation of transmission projects executed by PGCIL in the 12th Plan (2012-2017) presented in Parliament on Friday, a total 26,836 MW of LTA was surrendered by the customers from September 2010 to March 2018 but 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 the non-collection of compensation charges by PGCIL for stranded capacity, consumers are being put under extra financial burden," the report said.

As per CERC Regulations, a long-term customer may relinquish the long-term access rights fully or partly before the expiry of the full term of LTA but not before making payment of compensation for stranded capacity.

The CAG also found flaws in the company's project management capabilities that delayed projects and resulted in PGCIL losing the opportunity of earning Rs 112.51 crore towards additional Return on Equity as part of the tariff. The CAG found out that out of 18 projects selected for audit, only two projects were completed within the scheduled time and 13 projects were completed with delays ranging from 4 to 71 months. The remaining three projects were under execution with anticipated delays ranging from 6 to 109 months in completion.

The main reasons for the delay in projects were delay in submission of proposals for forest clearance, delay in providing front/ site by PGCIL, delay in supply/ issue of material/quantity clearance by PGCIL, and delay in finalizing amendment in LOA/approval of Bill of Material, which could have been controlled by better project management, the auditor report said.

The CAG report on PGCIL also found that the transmission utility did not adhere to the regulations where a transmission project associated with a generation unit precedes the date of commercial operation of the generating station at least by six months. However, the audit observed that out of 8 generation linked transmission projects selected in the audit that was completed till July 2018 there was a delay in the 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 the evacuation of power. Also, interim arrangements had to be made for 21 to 56 months to evacuate the power produced by five generating stations.

"Insufficient focus on up-gradation of existing lines in the planning process In the absence of the network plan, PGCIL had not prepared any separate plan for up-gradation of the existing system. Further, PGCIL did not have a system to assess the need for up-gradation before laying a new line, this data was not captured in their records. Therefore, a structured system of considering the possibility of up-gradation of existing lines and considering re-optimization of the system was not available. During 2012-17, while PGCIL commissioned 233 new lines, upgradation was carried out to only eight lines," the report said..