Assam power sector development programme delayed

CAG report finds that there has been several cases of projects being delayed 'considerably' leading to significant cost overrun

Funds meant for projects under the Assam Power Sector Development Programme (APSDP), partly funded by Asian Development Bank (ADB), remained unutilised, observed the recent finalised report of Comptroller and Auditor General (CAG). The audit report also found that there had been several cases of projects being delayed "considerably" leading to "significant" cost overrun.

During 2005-10, funds amounting to Rs. 684.40 crore (Rs. 428 crore from ADB and Rs. 256.40 crore from Assam government) were sanctioned for APSDP works. As against this, an amount of Rs. 603.30 crore was incurred on projects leaving an unspent amount of Rs. 81.10 crore at the end of March 2012. This unspent balance could not be utilised mainly due to delay in completion of the projects against respective schedules.

During January 2011 to November 2012, funds amounting to Rs 120.53 crore were further sanctioned (Rs 43.89 crore from ADB and Rs 76.64 crore from Assam government) for implanting the APSDP projects. The Assam Electricity Grid Corporation Ltd (AEGCL), however, could utilise only Rs 60.22 crore, which amounts to 49.96 per cent, on these projects till October 2012.

APSDP was introduced by the Assam government with the objectives to improve transmission capacity, efficiencies and improvement of transmission and distribution system, increase in availability of electricity in rural areas. For financial arrangements to implement the APSDP, tripartite agreements were entered between government of Assam, erstwhile ASEB and ADB.

Accordingly, ADB agreed to provide a loan of $250 million for implementing the APSDP through the Centre in the form of loans. Government of India, on the other hand, provided the project funds to the Assam government in the form of loan (10 per cent) and grants (90 per cent) with stipulation that Assam government will pass on the funds to erstwhile ASEB in the same proportion. The loan component was repayable in 20 years along with interest of 10.5 per cent per annum.

The project cost in excess of the amount approved by ADB was to be borne by Assam government.With a view to accelerate the works relating to transmission infrastructure projects, a task force was constituted by Union ministry of petroleum, which had suggested several remedial actions, which include taking up the preparatory activities in advance to project appraisal phase, awarding the work after splitting the projects into clearly defined packages, standardising the designs of tower fabrication etc.