Delay deprives MPPTC in visualising reduction of transmission losses: CAG

Source: The Hitavada      Date: 12 Jan 2019 12:35:23


By Rajan Raikwar,

The performance audit of Madhya Pradesh Power Transmission Company Limited (MPPTC), Jabalpur, says that absence of system in the company of submitting progress report of works to the Board of Directors (BoD) resulted in lack of monitoring of projects by BoD. Consequently, important issues arising during the execution of works such as right of way, land acquisition, delay in execution of works and poor performance of the contractors could not be addressed by the BoD.

This audit, carried out by Comptroller and Auditor General (CAG) of India, covers the activities of the company relating to construction of extra high tension (EHT) sub-stations and transmission lines (132 KV, 220 KV and 400 KV), including formulation and planning of projects, procurement, construction and commissioning of sub stations and transmission lines during 2012-13 to 2016-17.
The findings of audit further says that due to delay in the implementation of enterprise resource planning (ERP), the objective to integrate all operational functions, including project planning and monitoring, strengthening its business intelligence reporting, improved workflow and increased efficiency, could not be achieved.

The company has not prepared the ten-year perspective plan for transmission systems as per the Madhya Pradesh Electricity Regulatory Commission (MPERC) guidelines for capital expenditure. The annual capital expenditure plans were not submitted to the Board of Directors and MPERC for approval. The company could not achieve physical targets of works envisaged in five year plans due to non inclusion of those works in annual plans, not taking up planned works of approved DPRs and delay in execution.

The delay in completion and non completion of works deprived the company of the envisaged reduction of transmission losses amounting to Rs 71.61 crore during audit period. The main reasons for poor progress of works were commencements of works without conducting detailed survey, awarding of works without ensuring land availability, deficiencies in finalising layout and drawings, awarding multiple contracts simultaneously to single contractor and poor performance of contractors.

Nine sub-stations had not been connected to feeders by Discoms and six sub-stations were connected to feeders with delays ranging from four to eighteen months due to non construction of connecting lines by Discoms. As a result, these sub-stations remained unutilised for considerable periods and their stated objective of meeting additional load demand and improving voltage profile could not be achieved.

Three 220 KV sub stations remained under utilised as the load of these sub-stations was very low due to non synchronisation of construction related 132 KV transmission lines. Investment of Rs 6.16 crore on Eshagarh-Guna line remained idle due to construction of alternative Ashok Nagar –Eshagarh Line.

CAG recommended company to take necessary steps for completion of ERP project without further delay, adhere to the CAPEX guidelines of MPERC on preparation of ten year
perspective plan, five year plan and annual plans, award works only after completion of detailed surveys, take prompt action against defaulting contractors etc.

In the meantime, audit on fuel management in thermal power generating stations of Madhya Pradesh Power Generating Company limited also exposed many lacunae.  The audit report says that Madhya Pradesh Power Generating Company Limited operates four thermal power stations (TPSs) with a total installed capacity of 4,080 Mega Watt with coal and oil as the primary and secondary fuel respectively. During the period 2014-17, the company incurred Rs 13,263.17 crore on procurement of fuel which constituted 56 percent of the total generation cost.

The audit covered the company’s activities relating to fuel management in all the four thermal power stations (TPSs) during the period 2014-17. The audit finding on fuel management by the company during 2014-17 says that company failed to reduce its contracted quantity of coal from South Eastern Coalfields Limited (SECL) even when the Central Electricity Authority had approved retirement of two units of Amarkantak Thermal Power Station in March 2016. Consequently company became liable to pay compensation of Rs 17.21 crore for short lifting of 6.27 lakh metric tones (LMT) of coal. The company failed to swap coal from the more distant SECL to the nearer Western Coalfields Limited (WCL) for supply of 13.37 LMT coal for its Shri Singaji TPS resulting in avoidable expenditure of Rs 80.10 crore towards transportation.

At Satpura TPS, the company had to pay incentive on account of excess supply of coal in one agreement and penalty on account of short lifting of coal in another agreement to WCL due to failure in judiciously rearranging the supply of coal among the agreements. This resulted in avoidable loss of Rs 50.96 crores. The company short lifted 12.68 LMT of indigenous coal while 1.76 LMT of costlier imported coal was procured. This resulted in extra expenditure of Rs 51.24 crore. The actual station heat rate (SHR) was higher than the norms prescribed by Madhya Pradesh Electricity Regulatory Commission (MPERC) in all thermal power stations (TPSs) during 2014-17 (except in Amarkantak TPS during 2015-17).

The reasons for higher SHR and consequent excess coal consumption were inadequate maintenance and failure to ensure timely overhauling of TPSs, partial loading of the plant and deviations in the technical parameters. Higher SHR resulted in excess consumption of 26.88 LMT of coal costing Rs 866.12 crore. During the period 2014-17, TPSs (except Amarkantak TPS and Sanjay Gandhi TPS Power House III) consumed fuel oil of 20,123 kilo liter costing Rs 95.80 crore, in excess of the norms prescribed by MPERC.

This was due to higher consumption of oil on regular start up, frequent shut down of plant, partial loading, coal flow interruption and coal mill outages. CAG audit recommended that company should assess and procure coal as per actual requirement of units in operations in its thermal power stations (TPSs). It should ensure swapping of coal of decommissioned units for the power plants situated nearer to mines in future. It should lift available indigenous coal and avoid procurement of costlier imported coal