CAG slams Mah govt, power firm for delay in meeting deficit

The Comptroller and Auditor General (CAG) has criticised the Maharashtra government and MahaGenco, the state-run power generation company, for not rolling out a corporate plan to achieve its objective of providing power for all by 2012.

CAG observed that the government and the power generation company failed to factor adequate land acquisition and statutory clearances into planning new projects.

CAG, in its report up to March 31, 2010, tabled recently in the state legislature, said Maharashtra being a power-deficit state could not meet the peak demand and the deficit remained between 25 and 43 per cent during 2005-10. The power shortfall at the end of 2009-10 was more than 4,000 Mw.

The capacity additions planned by MahaGenco were not commensurate with the power deficit. As against the required capacity addition of 5,210 Mw, the action additions by MahaGenco was only 625 Mw during 2005-10. In April 2005, the state government signed memoranda of understanding with eight independent power producers (IPPs) for the capacity addition of 12,168 Mw and provided financial and administrative support to another 24 IPPs ( for 31,590 Mw capacity addition) for setting up projects. However, 20 IPPs (28,178 Mw) had not started their activities due to non acquisition of land. Out of potential of 7,852 Mw for renewable energy in the state, sources were tapped up to 2,775 Mw only by 2009-10. Thus, CAG said the objective of the National Electricity Policy to provide power for all by 2012 might not be achieved.

Moreover, CAG criticised MahaGenco for delays in completing the project. The commissioning of 250 Mw of Parli unit 6 and 250 Mw of Paras unit 3 was done without conducting trial run. Out of the remaining nine ongoing projects, six (2,750 Mw) were behind the schedule by five to ten months.

Besides, MahaGenco did not comply with the environment norms and also no environment impact assessment was conducted for its projects.

CAG has also asked the government to focus on formulating an integrated policy on electricity to monitor an achievable time-frame for completion of power projects. Besides, it has suggested that the government should prepare a corporate plan for monitoring physical and financial progress of ongoing projects and develop strategic mechanism to fast-track completion of the delayed ones.

According to CAG, MahaGenco should undertake a trial run before the power plant starts commercial operation to avoid frequent outages due to improper installation.