In what could add more teeth to the opposition party's allegations against the Narendra Modi-led Gujarat government, the Comptroller and Auditor General of India (CAG)'s latest report has brought out fresh details of undue favour by state public sector undertakings (PSUs) to Reliance Industries Limited (RIL) and Adani Power Limited (APL).
As per the CAG report for the year ended March 31, 2012, Gujarat State Petronet Limited (GSPL) was responsible for deviation from the agreed terms of recovery of transportation charges for transportation of gas from the specified entry point of the company's pipeline network led to passing of undue benefit of Rs 52.27 crore to RIL.
Similarly, Gujarat Urja Vikas Nigam Limited (GUVNL), as per CAG report, was involved in non-adherence to the terms of power purchase agreement (PPA), which led to short recovery of penalty of Rs 160.26 crore and passing of undue benefit to Adani Power Limited (APL).
CAG is of the view that GSPL did not safeguard its own interest leading to passing on of undue benefit of Rs 52.27 crore to RIL. GSPL had entered into a gas transportation agreement (GTA) with RIL for transportation of D6 gas from Bhadbhut in Bharuch district to RIL refinery in Jamnagar on March 2007.
However, when RIL began transporting gas from its KG-D6 filed to its refinery and GSPL started transporting the D6 gas from Bhadbhut to RIL's refinery in Jamnagar, the latter did not invoke the GTA terms and instead charged RIL a single rate on the quantity transported, thereby passing of undue benefit of Rs 52.27 crore to RIL.
On the other hand, the CAG report observed that GUVNL recovered a penalty of only Rs 79.82 crore from APL for its failure to supply power and also for the short supply of power against GUVNL's entitlement in the power generated by APL during August 2009 to January 2012.
According to CAG, the actual penalty to be recovered by GUVNL from APL as per PPA terms amounted to Rs 240.08 crore.