CAG detects shortcomings in Maharashtra PSUs

Maharashtra State Road Development Corporation Limited did not verify the traffic data provided by the contractor and recover its share of Rs 54.59 crore in excess toll revenue

GN Bureau | May 19, 2017


#CAG   #Maharashtra   #PSU  


The Comptroller and Auditor General has noticed shortcomings in Maharashtra PSUs and said that the Maharashtra Airport Development Company Limited even after 14 years of its existence could not develop/expand any airport due to the absence of a comprehensive long term plan.

The report said that the total turnover of 65 working PSUs was Rs 91,397.69 crore in 2015-16 as per their latest finalised accounts. This turnover was equal to 4.64 per cent of the State Gross Domestic Product indicating the important role played by the state PSUs in the economy. The working PSUs incurred an overall loss of Rs 6,734.61 crore in 2015-16 and they had accumulated losses of Rs 18,027.42 crore as on 31 March 2016.

As on 31 March 2016, the investment (Capital and long term loans) in 87 PSUs was Rs 1,75,321.42 crore. It grew by 123.78 percent from Rs 78,346.12 crore in 2011-12 mainly because of increase in investment in power sector. The government contributed Rs 4,157.01 crore towards equity, loans and grants/subsidies during 2015-16.

During the year 2015-16, out of 65 working PSUs, 36 PSUs earned profit of Rs 3,097.88 crore and 22 PSUs incurred loss of Rs 9,832.49 crore. Three PSUs prepared their accounts on no profit no loss basis and four PSUs were under preparation and had not prepared profit and loss account. The majorcontributor to profit was Maharashtra State Electricity Transmission Company Limited (Rs 2,599.88 crore). Heavy losses were incurred by Maharashtra State Power Generation Company Limited (Rs 8,742.04 crore), Maharashtra State Electricity Distribution Company Limited (Rs 462.15 crore) and Maharashtra State Road Transport Corporation (Rs 391.01 crore).

The report said that City and Industrial Development Corporation of Maharashtra Limited appointed IT Consultant without properly defining scope of work and time line resulting in time overrun and cost escalation. CIDCO executed the construction of Exhibition Centre without proper conceptualisation and planning which resulted in frequent changes in the scope of the project.

CIDCO appointed a consultant on nomination basis and deficiencies in their performance also contributed to the time and cost overrun.

The GoM and central agencies continued releasing funds to Mahatma Phule Backward Class Development Corporation Limited, Vasantrao Naik Vimukta Jatis and Nomadic Tribes Development Corporation Limited and Sahitya Ratna Lokshahir Annabhau Sathe Development Corporation Limited (SRLABSDCL) without any due diligence regarding the requirement of fund which resulted in huge unspent balances and irregular diversion of funds. The companies did not ensure authenticity and completeness of documents/records of the beneficiaries and as a result loans were disbursed to ineligible applicants. Post disbursement monitoring and impact analysis studies were not conducted. Internal controls were weak/non-existent which resulted in irregularities in implementation of schemes.

Maharashtra Airport Development Company Limited even after 14 years of its existence could not develop/expand any airport due to absence of a comprehensive long term plan. Decisions were being taken on ad hoc basis without any firm development model for airports. There were avoidable delays in acquiring the land for the projects. Acquisition of land in excess of requirement and idling of land were also noticed.

Incorrect categorisation and application of tariff, delay in generation /issue of bills and payment of ineligible prompt payment discount resulted in loss of revenue to Maharashtra State Electricity Distribution Company Limited. The company incurred an avoidable extra expenditure of Rs 3.65 crore in short term purchase of power.

Maharashtra State Road Development Corporation Limited did not verify the traffic data provided by the contractor and recover its share of Rs 54.59 crore in excess toll revenue. The company by changing original plans for merger of flyovers incurred wasteful expenditure of Rs 1.65 crore on the Kapurbawadi flyover project.

Delay in awarding contracts for advertisements rights resulted in loss of Rs 1.46 crore to Maharashtra State Road Transport Corporation.


 

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