Rs 2,300 Crore Loss Incurred By Tamil Nadu Electricity Department; CAG Reports Shows Discrepancies In Last 5 years

According to the CAG report, Eight private companies with long-term electricity contracts did not provide electricity for the first two years

Rs 5,000 crore avoidable expenses in five years for TANGEDCO. (Image: ABP Nadu)

Chennai: The Tamil Nadu government on Thursday tabled the Audit Report for 2019 in the Legislative Assembly. According to the reports, there has been a huge loss incurred due to the purchase of electricity from the private sector for inflated prices from 2013 to 2018.

According to the CAG report, in 2018, the Tamil Nadu Electricity Generating and Distribution Corporation (TANGEDCO) used only 60 per cent of its expenditure on electricity purchases. It also bought 24,164.84 million units of electricity from the private sector for Rs 11,873.37 crore in 2013-14 and 29,758.38 million units in 2017-18 for Rs 3,13,564.33 crore as reported by ABP Nadu. 

The CAG cites three basic reasons for the increase in electricity purchases from the private sector.            

1. TANGEDCO's traditional energy sources did not increase power generation capacity.
2. Inactivity of the distribution company's hydropower projects, thermal power projects and gas power projects.
3. Delay in federal power projects. 

According to the CAG report, Eight private companies with long-term electricity contracts did not provide electricity for the first two years. The Tamil Nadu Electricity Department has not tried to seek compensation for this. However, from the third year onwards, the market value of the unit has been replaced by electricity based on the market value to be determined at the time of signing the contract. Thus, the loss to the Tamil Nadu Electricity Department alone is Rs. 1,116.04 crore.   

2,381.54 crore loss to the Tamil Nadu Electricity Board due to delays in the Central Government's power generation projects. It has procured an additional Rs 2,099.48 crore to meet the power shortage.

Also, due to non-compliance with the contract renewal process in a timely manner, electricity was procured on the basis of daily shortage. As a result, the power sector incurred an additional Rs 139.48 crore. It also said such costs could have been avoided if the contract had been renewed in a timely manner.

Due to the delay given by the Tamil Nadu Electricity Regulatory Authority to the manufacturers to start the solar power project, the Power Generation Corporation had to pay higher fees. As a result, an additional Rs 605.48 crore was spent, the CAC said in a statement.