Hydro project delays caused Rs 14k cr loss: CAG

 Inordinate delay in planning and execution of 16 hydropower projects by four central public sector enterprises including NHPC Limited has cost Rs 14,707 crore to the public exchequer, according to Comptroller and Auditor General of India (CAG).

“Delay in execution of 16 projects by the four public sector enterprises resulted in revision of their initial approved cost of Rs 30,005 crore to Rs 44,712 crore. In seven completed and ongoing projects, the cost overrun was in the range of 53 to 148 per cent,” the national auditor noted in his report, tabled in Parliament on Friday.

This had its toll on the power generation target set for the 11th Five Year plan. NHPC Limited, SJVN Limited, THDC India Limited and North-Eastern Electric Power Corporation (NEEPC) Limited were required to add 11,813 MW of hydropower during April 7 to March 2012, but their actual achievement (till March 2012) was just 1,550 MW.

The auditor noted the entire process for project planning and implementation was beset with “inordinate delays”. All four hydropower companies prepared their capacity addition plan without “due diligence” and failed to tie up modalities with stakeholders.
Because of delays, hydropower companies might add only 3,774 MW capacity in 12 projects in the 12th Five Year Plan (2012-2017) as against 14,535 MW in 33 projects envisaged under the Hydro Power Policy 2008.

The CAG also that NHPC extended “undue favour” to M/S HJV, led by Maytas Infra Limited, not only in award of contract but also in its execution. NHPC considered bid of Maytas in case of civil works package of Chutak project, though it was decided to set aside their bid in view of their poor performance in Parbati-II project.

NHPC extended advances of Rs 131.65 crore to M/S HJV beyond contractual provisions. On being cited during audit, the central public sector enterprise terminated the contract due to persistent slow progress of work. But this, resulted in blocking of Rs 182 crore besides time overrun of 99 months in execution of project.

The NEEPC suffered a loss of Rs 19.88 crore due to damage of extra items of works executed by the contractor in two accidents in January 2007 and December 2007. This amount could not be recovered by NEEPCO either from the contractor or the insurance company as the contractor had not insured these extra items.

The Ministry of Power did not form an SPV for survey, investigation and implementation of the Siang and Subansiri multi-purpose projects in the Brahmaputra basin in Arunachal Pradesh.