Maharashtra has no plan yet for CAG audit on Tata Power, RInfra

Consumers in Mumbai cannot immediately expect Delhi model wherein audit of discoms by CAG has been ordered

Electricity consumers in Mumbai will have to wait for an audit by the Comptroller and Auditor General (CAG) for Tata Power and Reliance Infrastructure as the Congress-led government in the state has not taken any formal decision in this regard. The state government has so far not indicated its plan to adopt the model adopted by Aam Aadmi Party-led government in Delhi to conduct CAG audit for Mumbai power companies.

Reliance Infrastructure has a consumer base of  2.8 million, while Tata Power has 425,000 consumers. When contacted, Tata Power and Reliance Infrastructure declined to comment. A state government official, who did not want to be identified, told Business Standard: “Currently, Tata Power and Reliance Infrastructure carry out their annual audits by deploying leading audit firms. There is no proposal as of now before the government to order CAG audit of these two companies for their Mumbai operations.”

However, the official admitted that CAG audit of these companies can be possible under Section 20 of the CAG Act, 1971, which regulates the audit of accounts of authorities or bodies that are otherwise not subject to audit by the CAG.

Section 20 reads: “The Comptroller and Auditor-General may propose to the President or the Governor of a State or the Administrator of a Union territory having a Legislative Assembly, as the case may be, that he may authorised to undertake the audit of accounts of any body or authority, the audit of the account of which has not been entrusted to him by law, if he is of opinion that such audit is necessary because a substantial amount has been invested in.”

Central Electricity Regulatory Commission's former chairman Pramod Deo said CAG audit of Tata Power and Reliance Infrastructure can be done. He, however, added that the state government will have to take a call in this regard.

Ashok Pendse, consumer representative at the Maharashtra Electricity Regulatory Commission, shared Deo's views saying that CAG’s audit of Tata Power and Reliance Infrastructure will be a reality. ''However, at the end of the day, what will come out of the CAG audit should not be like what actually appears out of magician’s hat,” he noted.

D Radhakrishna, a power-sector analyst, says a CAG audit should be carried out on the generating companies, too, because in power supply, the contribution of discoms is only 20 per cent and 80 per cent of the cost is attributed to generation and transmission.

“Thus, CAG audit for Mumbai power companies can be done as per Sec 20 of CAG Act 1971. The state government can order such an audit,” he added.