CAG highlights glaring lapses in rural electrification scheme rollout

CAG report findings

The Comptroller and Auditor General of India (CAG) report on the implementation of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) across five electricity supply companies (escoms) in Karnataka has revealed several discrepancies in allotment of contracts and deficiencies in the management of the funds under the scheme.

Though 39 unelectrified villages, 13,949 partially electrified villages, and 5,70,922 BPL households were electrified in the state under the said schemes, the report pointed out that the failure to monitor the projects by the state government and respective escoms had resulted in cost and time overrun.

The five escoms considered for the CAG audit are Bangalore Electricity Supply Company Limited (Bescom), Chamundeshwari Electricity Supply Corporation Limited (CESC), Gulbarga Electricity Supply Company Limited (Gescom), Hubli Electricity Supply Company Limited (Hescom), and Mangalore Electricity Supply Company Limited (Mescom).

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Pointing out the major discrepancies in awarding the contract, the audit observed that all five escoms appointed a project management agency (PMA) without inviting tenders, by availing exemption under Section 4G of Karnataka Transparency in Public Procurement (KTPP) Act, 1999. Also, the PMA was appointed at a higher rate against what was allowed in the scheme.

Deviations were also observed in selecting the bidder while awarding the contract and it was observed that non-responsive bidders who had failed to submit all the required documents for evaluation were also considered. “The grounds on which the bidder was made responsive was not justified as the essential requirements of the bid conditions were not met with, and the action had negated the purpose of tendering. Moreover, awarding the work to non-responsive bidders violated KTPP Rules,” the audit report noted.

According to the report, the escoms took 12 to 37 months beyond the stipulated periods thus deferring the beneficiaries of the project. The major reason for time overrun was attributed to the delay in awarding the contract and initiating the work on the ground. In a few cases, there were delays in acquiring the statutory clearances from forest and railway authorities to execute the works.

Also, the escoms failed to conduct field surveys before preparing the detailed project report (DPR), resulting in variation in the quantity of materials required and reallocation of costs multiple times.

An additional financial burden of Rs 225.49 crore over and above the sanctioned cost on which no grant was eligible under DDUGJY was also recorded, owing to the procurement of materials at a higher cost, awarding the contract at higher rates, and failure to penalise the contractors for the delay in completion of the projects.

The state government and the escoms had also failed to monitor the project progress periodically, the report noted.

Both the DDUGJY and Saubhagya are Centre’s initiatives that are directed at rural electrification by providing last-mile connectivity and electricity connections to all unelectrified households.