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GURUGRAM: With its mismanaged finances and a functional disarray, the power sector continues to be in the red. A CAG report tabled in the state assembly last month reveals glaring irregularities in how the department functions, pinning the losses to the state exchequer at Rs 4,000 crore in the financial year ending 2018.

The report, prepared in November, analysed the financial dealings and performance of public sector units. It stated that the losses caused by the Dakshin Haryana Bijli Vitran Nigam ( DHBVN ) were because of “avoidable burden of interest, loss of interest, wasteful expenditure and avoidable payments.”

The net worth of the discom has been negative since 2013-14, when it was –Rs 16,806 crore. It worsened the following financial year to –Rs 20,802 crore. Accumulated losses also shot up — from Rs 25,042 crore to Rs 29,302 crore — in the five years that followed. The financial year of 2017-18, when its net worth went up to –Rs 12,155 crore, was its best in five years. It was also the year power companies made a profit of Rs 794 crore.

The report attributed this to functional lapses — like problems with how data on defaulters was maintained. Its recovery of additional advance consumption deposit, paid by consumers when they take new connections, has been short by Rs 900 crore. Because of this, it had to bear an avoidable interest burden of Rs 122.05 crore on increased borrowings. The internal control system was also not found to be adequate.

Besides, remittances into banks were not matched periodically with bank statements, the report said.

The report also raised questions about departmental expenditure and release of power supply. For instance, the decision to go for limited tender enquiry and not open tender for purchase of transformer oil led to an additional expenditure of Rs 5 crore. Then, between 2013 and 2018, it supplied excess power of 1,615 metered units to unmetered agriculture pumpset consumers. This cost the discom a loss of Rs 18.9 crore. It also stepped up power supply to 127 feeders to 24 hours, when they were not eligible for even 21 hours’ supply.

In 2015, the Centre had identified power distribution as the “weakest link in the value chain” and launched the Ujwal DISCOM Assurance Yojna (UDAY) to address that. The idea was to revive power distribution companies with a complete overhaul in how they function. The CAG report stated the implementation of UDAY has had glaring gaps.

One of the most important targets — of restricting aggregate technical and commercial losses to 15% — was not met. In fact, between 2013 and 2018, the department incurred additional losses of about Rs 2700 crore as technical and commercial losses. Another guideline, that all subsidy dues be cleared on time, was also not followed — with only Rs 3,040 crore of the Rs 4,577 crore that was due released. The subsidy not released to registered gaushalas, farmers whose crops were damaged and those with short receipt cases shot up to Rs 1,543 crore in 2017-18 from the Rs 525 crore in 2013-14. Then, only about 2.5% distribution transformers have switched to smart metering – just 3,857 against a target 8,22,747.

In response to the findings of the report, a DHBVN official was non-committal: “We know about the report. We are reviewing the findings and verifying the claims. Once that is done, we will prepare a detailed report on it.”

