CAG report underlines time and cost overrun of Raj power plant

A report by the Comptroller and Auditor General (CAG) today pointed out the time and cost overrun in the setting up of Kalisindh Thermal Power Project (KaTPP) in Rajasthan.
"The actual cost (Rs 9,479. 51 crore) of commissioning of the project exceeded the estimated cost (Rs 4,600 crore) by 106.08 per cent," it said.
"The cost overrun is mainly attributed to increased cost of engineering, procurement and commission contract, water storage system, railway siding, interest and finance cost due to time overruns and execution of works not envisaged in Detailed Project Report," the CAG report on PSU for the year ended March 31, 2016 said.

The report, which was presented in the state Assembly, mentioned that the work orders for setting up the project was awarded in October 2008 to BGR Energy systems Ltd Chennai at a negotiated price of Rs 4,900.06 crore.
The contractual commission period of Unit-I and Unit-II was October 2011 and January 2012 respectively. The units were commissioned after delays of 31 months and 42 months respectively, it said.
The report noted that the project could not achieve the operational parameters fixed by the Rajasthan Electricity Regulatory Commission in respect of Plant Load Factor, Station Heat Rate, consumption of oil and auxiliary consumption.

"The company also did not establish environment management cell at the KaTPP as per the condition of the environment clearance. Thus, it failed to achieve the stack emission parameters prescribed by the Ministry of Environment and Forest," CAG added.