The recent CAG report points out several performance and financial anomalies in Himachal Pradesh’s power sector

The report of the Comptroller and Auditor General of India presented at the Himachal Pradesh Assembly during the recent budget session has pointed out various anomalies on the part of the State’s power sector. The private sector companies have kept environmental concerns aside and let the river beds get dried up by not letting adequate flow of water, say the report.

The State government that claims of having a gross potential of 23,000 MWs of hydro energy could just make 1,805 MW of power potential operational out of 10,131 MWs it had allotted to the independent power producers (IPPs) in the past 10 years, according to the report. Out of 559 such projects allotted to the IPPs, only 55 were made operational.

While giving a river-wise potential of hydro power in the hill State, the CAG report said that the State could have harnessed about 7,922 MW of potential including 473 MW in the State sector, 5,644 MW in Centre or joint sector and 1,805 MW in private sector. The report has also brought out irregularities committed by a private company Jai Prakash Associates that had enhanced, on its own, its generation capacity to 1,200 MW from the allotted 1,000 MWs in its Karcham Wangtoo project in Kinnaur district.

Execution of 40 hydropower projects having total capacity of 315.35 MW could not progress well and suffered due to reasons such as inadequate or non-conducting of feasibility studies, non-approval of Detailed Project Reports (DPRs) and non-signing of implementation agreements by the IPPs within the prescribed time frame.

Negligence of environment concern was quite visible as for the sustenance of aquatic eco-system and nearby ground water aquifers; minimum water flow of 15 per cent immediately downstream was not kept by the IPPs, blamed the report. The hydro power policy requires that IPPs should ensure a minimum flow of 15 per cent water immediately downstream of the diversion structure of the project all time, including the lean season of November to March, keeping in mind the fragile ecology and in addressing issues concerning riparian rights, drinking water and health.

The reports pointed out that in the Manjhal project in Chamba district, one out of 16 operational projects selected for test check, the river beds had completely dried up and adequate flow of water for sustenance of ecology and nearby ground water aquifers was not available at all.

After Himachal Pradesh’s Power Department got a nod from the State’s regulatory commission for raising an energy bill at less than market rates, it resulted in a revenue loss of Rs 19.02 crore, the CAG report found out. “Against 73.169585 million units of energy, the State power board accepted 67.4189 million units and demand was created against the Power Trading Corporation (PTC) for reduced units of energy which resulted in loss of Rs 3.31 crore,” the report said.

In another glaring loss, the PTC had drawn a supplementary agreement which made the government liable to bear all charges or losses which were required to be borne by PTC.