Bringing Delhi’s private power distribution companies under the CAG scanner is turning out to be a distant dream for Chief Minister Arvind Kejriwal.
In yet another apparent move to delay scrutiny of their accounts, the three distribution companies (discoms) on Wednesday approached the Delhi High Court challenging the CAG’s authority to audit their finances.
As the matter has landed in court, it is probable that permanent relief to consumers through lower power tariffs will be delayed as the Aam Aadmi Party-led Delhi Government was relying on the audit results to work out a cheaper tariff.
Kejriwal and his Government were relying on the audit reports to put an end to power subsidy and reducing tariffs as they were ‘definite’ that irregularities in the accounts of the discoms would be found after the procedure.
Kejriwal had ordered the CAG audit on January 7. The process was expected to begin on January 21 but had to be halted after the discoms opposed the audit calling it illegal, according to a CAG official.
While announcing the audit Kejriwal had said: “Till the audit is completed, we are reducing the power tariff by half for those using up to 400 units of electricity. We are hopeful that the Government will not have to provide further subsidy after the audit is completed.” However, after the petitions filed by the discoms, the promise of getting lower electricity rates seems like a distant dream.
The discoms filed a writ petition in the Delhi High Court arguing that only reputed firms empanelled by the audit watchdog could do the job and not the CAG itself.
The first hearing of the case is slated for February 5. The audit has no legal sanctity said the private power entities. “Section 20 of the CAG Act under which the present audit is sought to be done does not empower the CAG to conduct audit of private companies,” said a BSES spokesperson, adding that the section only talks of ‘Bodies and Authorities’ other than those incorporated ‘under any law made by Parliament.’
Meanwhile, a bench comprising Chief Justice NV Ramana and Justice Rajiv Sahai Endlaw transferred a 2011 PIl, filed by the non-governmental oganisation URJA seeking a CAG audit into the accounts of discoms and a CBI probe into the alleged irregularities, to another court. The next hearing for the same is also slated on February 5.
On Tuesday, Tata Power Delhi Distribution ltd (TPDDl) had said the CAG had refused to appoint auditors to scrutinize its accounts on the company’s own request made in 2002 soon after it started operations after privatization. The CAG had then allegedly argued that audit of private companies cannot be done by CAG. A senior CAG official could not confirm whether a request from the discom in 2002 for audit had been turned down by the CAG. He, however, justified the current CAG audit arguing it was in ‘public interest’ after the lieutenant-Governor’s request.
The discoms were incorporated under the Companies Act 1956 and granted a distribution license by the Delhi Electricity Regulatory Commission. The firms say they welcome an independent audit but within the purview of the law. Reliance Infrastructure holds 51 per cent stake in BSES Rajdhani and BSES Yamuna which cater to 75 per cent of the city’s 3.4 million consumers. Tata Power holds 51 per cent in TPDDl which caters to the rest. The Delhi Government holds the balance 49 per cent stake in each of the three companies through its holding company Delhi Power Company ltd.