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CAG outs discoms: turns out AAP was right about power companies

Suhas Munshi | Updated on: 13 February 2017, 3:46 IST

The latest CAG draft report, which has accused discoms in Delhi of fudging their books to the tune of Rs 8,000 crore, has caused a furore in the capital.

The Aam Aadmi Party (AAP) had always alleged a nexus between the Sheila Dikshit government and discoms. It had also called for an audit of the discoms. The party on 18 August claimed vindication, based on the CAG report.

According to AAP spokesperson Dilip Pandey, "Delhi government should take steps so that the CAG report is made public at the earliest. It should initiate a criminal investigation in the case, prosecute the guilty, and recover the public money."

Based on the discovery of large scale discrepancies in the books of the three discoms', CAG reached the conclusion that there was scope to reduce the power bills of consumers.

"Dikshit knew about this, but did not say anything. Even the BJP was aware of this, but chose to remain quiet. It was only when AAP started talking about it that the issue came to light," Pandey said.

The latest CAG draft report details how the three major discoms in Delhi fudged their books and overcharged consumers. CAG has found a discrepancy of Rs 8,000 crore between what the power companies wanted the consumers to pay, and what the consumers actually paid.

BSES Yamuna Power Ltd (BYPL) and BSES Rajdhani Power Ltd (BRPL) controlled by Anil Ambani's Reliance group and Tata Power Delhi Distribution Ltd (TPDDL) - have been indicted by the CAG on several counts.

So how exactly did the discoms fudge their books? Here are some points from the CAG report, a copy of which is with Catch.

1. Despite explicit guidelines asking companies to change their auditors every year, BRPL and BYPL continued with the same auditors for 11 years.

2. BRPL and BYPL showed only 1/3rd of the development charges they charged the consumers as income.

3. Accounting of meters by the discoms was incorrect and non-transparent.

4. TATA group's TPDDL has paid over Rs 90 crore, and continues to pay, for expenses to its own power generation plant in Rithala, which has been shut since 2013.

5. TPDDL sold surplus electricity but did not show it as income.

6. Discoms did not show insurance claims as earnings

7. In one case, Reliance Energy Limited (REL) itself participated as the bidder and unsurprisingly bagged the contract. It was a case of conflict of interest since two - BRPL and BYPL - of the three discoms in Delhi are controlled by REL.

8. In one case, employees of BRPL embezzled Rs 9.06 crore that was meant for consumers.

9. BRPL procured meters from REL at Rs 1,080 per meter, while the same discom purchased meters from a company based in China for Rs 699.

First published: 19 August 2015, 12:37 IST
Suhas Munshi @suhasmunshi

He hasn't been to journalism school, as evident by his refusal to end articles with 'ENDS' or 'EOM'. Principal correspondent at Catch, Suhas studied engineering and wrote code for a living before moving to writing mystery-shrouded-pall-of-gloom crime stories. On being accepted as an intern at Livemint in 2010, he etched PRESS onto his scooter. Some more bylines followed in Hindustan Times, Times of India and Mail Today.