Five reasons why Kejriwal was right about discoms' misconduct

The draft CAG report on private power distribution companies, known as discoms, has been a huge victory for Arvind Kejriwal, who ordered the audit during the AAP government's 49-day regime in Delhi in 2013-14.

The report indicts the discoms for manipulating consumer figures, scrappy sale details and actions detrimental to consumer interests, including buying costly power, inflating costs, suppressing revenue, dealing with other private companies without tenders and giving undue favours to group companies.

Here are major findings.

1. The CAG report reveals that BRPL and BYPL, run by Reliance ADAG, and TPDDL, run by Tata Power, had inflated their dues to be recovered from consumers by almost Rs 8,000 crore.

2. The two Anil Ambani group-controlled discoms, BRPL and BYPL, acquired material and services worth Rs 1,428 crore from their sister concern Reliance Energy Ltd (REL) without the approval of their board of directors, among who are government nominees. The audit found that the process of centralised procurement by REL violated the basic norms of procurement, led to procurements at inflated prices, and involved serious conflict of interest.

3. Tata group's TPDDL paid at least Rs 93.5 crore to its own power generation plant in Rithala as fixed charges, though no power had been supplied from this plant since March 2013. The payment continues even now.

4. In one case, REL itself participated as a bidder and won the contract. "Participation of M/s REL as a bidder in a tendering process which was conducted and evaluated by itself created a serious conflict of interest and compromised the objectivity of the whole selection process," the report said. BRPL procured 6.43 lakh meters from REL in 2005 at the rate of Rs 1,080 per meter. However, REL had procured these meters from Kaifa Technology Ltd, China in March 2004 at a landed cost of Rs 699 per meter.

5. TR Chadha & Co was appointed to assess the actual value of stores transferred to discoms by the government. "This involved a serious conflict of interest as M/s TR Chadha & Co was also the auditor of BRPL since 2002-03 to 2012-13," the report said.

In October 2012, AAP chief Arvind Kejriwal had launched a bijlipaani satyagraha against inflated power and water bills by famously climbing a pole at Bana Ram's house in Tigri colony, Sangam Vihar constituency, Delhi, and restoring a power connection that had been snapped by the discom for non-payment of bills.