GANGTOK, 03 Feb: The Public Accounts Committee [PAC] has
taken serious note of various lapses while awarding power projects to private
players in 2008-09. The 96th Report of the PAC on the Report of the
Comptroller and Auditor General of India for the year 2008-09 was tabled in the
Legislative Assembly on 29 January last month.
The PAC has taken serious note of the fact that once the
projects are awarded to private developers after the fulfillment of necessary
procedures, the failure of the company to construct the project within the stipulated
time frame or instances of shutting down after the commissioning led to
consequent loss of potential energy revenues of the state.
The Audit Report had revealed that the state government did
not incorporate specific conditions in agreements to safeguard its interests in
such cases where the power plants had to be shut down.
The PAC has asked for details of the visits conducted by the
Eastern Region Power Committee, GOI and that of Sikkim State Electricity
Regulatory Commission and their consequent findings on failures of private
developers, if any and necessary action taken thereof.
Further, the CAG report had also revealed that modalities and
strategy for transfer of projects on expiry of agreement period including the
manpower engaged in the projects had not been formulated by the state
government.
The committee has recommended that these be worked out and
completed within a clearly set timeframe.
The Audit Report had disclosed that as per the agreement
entered with the Independent Power Projects [IPPs] in six joint venture
projects of 100 MW and above with the state’s share of 26 percent equity by way
of execution of equity subscription agreement, which was supposed to be
executed within six months from the date of signing the agreement for award of
the power projects, had not been signed even after three years of award of
project.
In response, the Energy and Power department had stated that the
process for execution of equity share subscription agreement had been initiated
and a draft agreement has been forwarded to the state government for approval.
The PAC report adds that the state government is working out
details of the equity amount to be infused by the state and other aspects in
coordination with developers.
With regards to 10 power projects signed between 2002-03 not
being charged any ‘processing fees’ or ‘upfront premium’ the department said
that it was a “conscious decision of the state government not to charge the
upfront premium on the developers since the developer had to do the
pre-feasibility study at their own cost and collection of such fees would
unnecessarily burden the capital cost of projects thereby raising the cost of
generation”.
It was further stated that this was done in order to attract
more developers to the state.
The PAC accepted this explanation and recommended the
department to ensure that such projects ultimately benefit the state in the
long run.
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