Guj PSUs draw flak for poor performance

The Comptroller and Auditor-General of India (CAG) has pulled up nine government companies and corporations for poor performance and financial irregularities. CAG, in its report for the year ended March 31, 2007 that was tabled in the Assembly on Wednesday, criticised these PSUs for unsatisfactory performance and irregularities.

Public sector entities that drew flak from CAG for financial irregularities include Gujarat Industrial Investment Corporation Limited (GIIC), Gujarat Water Resources Development Corporation Limited (GWRDC), Sardar Sarovar Narmada Nigam Limited (SSNNL) and Gujarat State Petronet Limited (GSPL).

Taking serious note of deficiencies in the management of PSUs involving financial irregularities, the CAG report points out that GIIC lost Rs 2.57 crore due to settlement of dues under a one-time settlement scheme to an ineligible unit. "GSPL short recovered inter-connectivity charges of Rs 20.10 crore from customers and did not recover penalty and interest of Rs 14.73 crore for breach of agreement from a private firm," says the report.

GWRDC incurred imprudent expenditure of Rs 17.02 crore on failed economic design of check dams of Sujalam Sufalam Yojana, while SSNNL lost interest of Rs 1.92 crore due to premature investment of Rs 16.78 crore in construction of concrete lining of branch canal, the report adds.

CAG has also taken note of the poor performance of five government companies including Gujarat Mineral Development Corporation Limited (GMDC), Tourism Corporation of Gujarat (TCG), Gujarat State Handloom and Handicrafts Development Corporation Limited (GSHDC) and Gujarat State Electricity Corporation Limited.formerly known as Gujarat Electricity Board (GEB).

Pulling up GMDC for delay in the implementation of the Akrimota Thermal Power Project, CAG report says, "The company's performance in implementing the project was deficient due to improper management of funds and contracts." The cost and time overruns of the project led to an increase in per unit cost of generation from Rs 2.86 to Rs 5.28 for the year 2005-06. GMDC also had to pay extra expenditure of Rs 81.60 crore towards interest payment as the company did not avail loans on fixed rates of interest as suggested by the consultant.

CAG came down heavily on the erstwhile GEB for avoidable delays in renovation and modernisation (R&M) activities. These delays led to generation loss (2002-07) of 368.339 million units worth Rs 76.92 crore. The company also had to incur infructuous expenditure of Rs 40.29 crore due to undertaking of R&M activities, which were not needed.

In the case of Tourism Corporation of Gujarat, the CAG report observes that even after its existence of more than 30 years, the percentage of tourists availing of the company's facilities was negligible. "Of the 14 to 19 hotels and six to eight cafeterias, 63 to 93 per cent hotels and 83 to 100 per cent cafeterias of the company incurred operational losses during 2002-07," the report figures out.