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| Mismanagement costs PSEs Rs 202 crore: CAG |
| BS Reporter / Kolkata/ Bhubaneswar Mar 17, 2010, 00:51 IST |
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Deficiencies in management, non-compliance of rules, non-protection of financial interest, defective planning and inadequate monitoring of the state owned Public Sector Enterprises (PSEs) in the state resulted in a loss of about Rs 202 crore during 2008-09.
This was revealed in the audit report of the Comptroller and Auditor General of India (CAG) for 2008-09 tabled in the Orissa assembly today.
The transaction audit taken up by CAG stated that due to non-compliance of rules, directives, procedures and terms and conditions, the PSEs incurred a loss of Rs 162.32 crore. Similarly, Rs 29.44 crore loss was reported in four cases due to non-safeguard of the financial interest of the organisation.
While Rs 3.46 crore was lost due to defective or deficient planning in three cases, Rs 6.99 crore could not be recovered in two cases due to inadequate or deficient monitoring.
Transaction audit of Gridco revealed that Gridco allowed Bhushan Power and Steel Ltd (BPSL) and Bhushan Steel Ltd (BSL) to sell power in open access ignoring the terms of the Memorandum of Understanding (MoU) signed by them with the Orissa government. Further, Gridco purchased their surplus power at a higher rate, resulting in a loss of Rs 23.51 crore. Such “undue favour” also deprived Gridco of earning Rs 93.68 crore revenue, the report said.
Similarly, the purchase of inadvertent power from Nava Bharat Ferro Alloys at the rate applicable for scheduled power resulted in extra expenditure and loss Rs 8.84 crore to Gridco.
In case of Orissa Mining Corporation (OMC), CAG pointed out that improper calculation of tax liability led to short fall in deposit of advance income tax resulting in avoidable payment of interest of Rs 23.92 crore for 2006-07 and 2007-08.
Considering that the delay enabled OMC to retain cash with it for a longer time and the company could have earned interest on it at 4.25 percent, it suffered a loss of Rs 14.29 crore on interest differential apart from the non-compliance with the tax laws.
Besides, export of ore after expiry of the contract coupled with failure to execute agreement with the buyers of minerals for price revision before the start of loading resulted in loss of Rs 2.68 crore.
Sale of lumps without value addition through crushing by Kalinga Commercial Corporation (KCC) also deprived OMC of earning Rs 1.48 crore revenue. Keeping that in view, the audit report suggested the company to consider stopping sale of lump ore and sell it only after crushing which would generate additional revenue and profit.
The CAG report pointed out that deviation from the guidelines of the One Time Settlement Scheme (OTS) by the Orissa State Financial Corporation (OSFC) resulted in loss of Rs 25.95 crore. This also resulted in short realisation of initial security deposit of RS 41.75 lakh.
Besides, lack of monitoring and inaction on part of the management of OSFC to collect dues resulted in loss of Rs 6.99 crore.
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