State Public Sector Undertakings (PSUs) incurred overall losses to the tune of \\Rs6,485 crore besides infructuous investment of Rs7.59 crore during last three years.
The Comptroller and Auditor General (CAG) of India asked the Government for early winding up of as many as 28 non-working undertakings. The huge losses are attributed to various deficiencies, the major being bad management, by the CAG in its report on the PSUs for the year ended March 31, 2012.
The losses and infructuous investments could have been avoided with better management, the report said, adding there is a need for greater professionalism and accountability in the functioning of PSUs.
The report said that during 2011-12, seven out of the 306 working Public Sector Undertakings (PSUs) incurred a total loss of Rs1,009.79 crore as per their latest finalised accounts.
Heavy losses were incurred by the Grid co with Rs936.81 crore, followed by the Odisha Rural Housing and Development Corporation with Rs31.71 core, the Idcol Kalinga Iron Works Rs27.03 crore and the Odisha Power Transmission Corporation ltd (OPTCl) Rs12.73 crore.
There were 28 nonworking Government Companies, the CAG said and advised that as no purpose is served by keeping the PSUs in existence, they need to be wound up expeditiously.
On the performance audit relating to the Government Companies, the CAG expressed its displeasure over the functioning of the OPTCl during the last three years. The delayed execution of projects resulted in a cost overrun of Rs165.56 crore, blockade of funds of Rs328.52 crore and non-achievement of projected benefits of Rs650.18 crore .
The report said the OPTCl could add only 19 extra high tension (EHT) sub-stations, 3,105 mega voltage ampere transformer capacity and 1,909.121 Ckm EHT lines during the five-year period 2007-12 as against the actual planned addition of 33 EHT SSs, 6,227.50-MVA transformer capacity and laying of 2,987.768 Ckm of EHT lines. The shortfall was attributed to the delay in execution of projects beyond the scheduled dates, it said.
Referring to the sorry state of financial management, the CAG pointed out that the OPTCl incurred losses in all the years 2007-11 and the accumulated loss at the end of March 2012 was around Rs182 crore.
The company's borrowing as of March 2012 was Rs818 crore. Due to incorrect filing of Annual Revenue Requirement, the OPTCl could not even recover Rs77.27 crore through the tariff.
Indicting the OPTCl, the CAG said the company could not complete its projects as per the original schedule. In 22 cases, the time overrun was between 15 and 154 months, it said, adding that the mismatch between generation capacity and evacuation system resulted in non-evacuating the share of State from one IPP and two hydropower stations forgoing benefit of earning Rs97.98 crore towards transmission charges on 4067.68 units of energy.
The CAG said the OPTCl failed to install adequate numbers of capacitor banks in its sub-stations to regulate fluctuation in the voltage and the required software to bill the DISCOMs for reactive energy charges.
On the performance of 50-year-old Odisha Construction Corporation limited, the CAG observed that the company sustained a loss of Rs19.41 crore besides an extra expenditure of Rs49.62 crore by the Department of Water Resources due to acceptance of inflated offers during the period 2007-08 to 2011-12.
Besides, award of works at higher rates without analysing the costs of execution resulted in extension of undue favour to the sub-contractors, the report pointed out.