CAG finds deficiencies in Minjur Desalination plant

In its Report (Civil) for the year ended March 2011, the CAG noted that the performance audit has revealed "deficiencies such as non-preparation of Detailed Project Report (DPR) and additional financial burden to the government".

The CAG report for various departments, including Municipal Administration and Water Supply Department, tabled before the Assembly recommended that further seawater desalination projects, if any, be determined after a detailed study of the alternative modes.

"The DPR for setting up of the (100 million litres a day) desalination plant was not prepared. Comparative cost benefit of implementing the project by other alternative modes vis-a-vis PPP (Public-Private-Partnership) mode was not worked out before deciding to set up the plant on DBOOT (Design, Build, Own, Operate, Transfer) basis", it said.

An "avoidable expense" of Rs 6.95 crore was also incurred by Chennai Metropolitan Water Supply and Sewerage Board on electricity charges due to delay in getting the tariff changed from industrial tariff to one for high tension electricity connection for municipal water supply scheme, the CAG noted.

"The Board paid to TNEB Rs 6.95 crore in excess towards energy and demand charges at industrial tariff during the period July to December 2010", it said.

Having committed in the bid stage (November 2004) that municipal tariff would only be charged, and any extra charge would be on the Board's account, the Board should have taken up the matter with Tamil Nadu Energy Regulatory Commission well in advance and obtained orders, it said.

The CAG recommendations included Board revising water and sewerage charges to minimise its dependence on government support for purchase of desalinated water.