PMO wants status report on CAG objections

In the wake of the Comptroller & Auditor Generals claim that the Power Ministry bent over backwards to give undue benefit of Rs 1.20 lakh crore

In the wake of the Comptroller & Auditor Generals (CAG) claim that the Power Ministry bent over backwards to give undue benefit of Rs 1.20 lakh crore over next 25 years to Reliance Power Ltd in ultra mega power projects,Prime Minister Manmohan Singh has asked for a report from the Ministry on the CAG audit.

Sources said the Prime Ministers Office (PMO) wrote to the ministry after The Indian Express report on the CAGs follow-up audit that criticised the decision by the Empowered Group of Ministers (EGoM) headed by Power Minister Sushil kumar Shinde to let RPL use surplus coal at UMPPs at Sasan in Madhya Pradesh and Tilaiya in Jharkhand for its other projects.

The Power Ministry has handed the job of preparing the status report to Additional Secretary Ashok Lavasa,sources said.

Story continues below this ad

The CAG follow-up audit by M K Biswas,Principal Director of Commercial Audit and Ex-Officio Audit Board Member,estimates the undue benefit to RPL of Rs 42,009 crore in Sasan project and Rs 78,078 crore in Tilaiya project spread over 25 years.

The change in stand after award of Sasan UMPP vitiated a key commercial condition for the UMPPs. Power Ministry did not mention the financial implication of the proposal while moving the agenda note for the EGoM. RPL was unduly benefited by the EGoM decision, says the Biswas report.

The permission to use excess coal in other projects should be reviewed as no benefit on this account was passed to the consumers, it recommends.

Sources said CAG chief Vinod Rai also sent a letter to the ministry late last month reiterating the objections raised in the follow-up audit. He has asked the ministry to explain why it had not replied to the CAG or implemented the earlier recommendations.

Story continues below this ad

The Power Ministrys reaction to The Indian Express was that these were CAGs queries/observations but the report shows that the CAG sent the draft report to UMPP regulator Power Finance Corp in October 2009.