The Comptroller and Auditor General (CAG), in its Performance Audit Report on the Kudankulam Nuclear Power Project (KKNPP), has pointed out a number of deficiencies in the execution and commissioning of Units I and II of the plant.
“The scheduled date of completion was postponed from October 30, 2007 to December 31, 2011 for Unit I and from October 30, 2008 to December 31, 2012 for Unit II, inter-alia, due to delayed completion of different activities, of which many were attributable to the M/s Atomstroyexport (ASE), a company responsible for undertaking the Russian scope of work,” the report said.
“However, there was no revision of schedule of repayment of the Russian credit,” the report added. “This resulted in start of repayment of Russian credit, before revenue generation, causing an additional interest burden on NPCIL to the tune of ₹449.92 crore.”
The CAG also found that the Nuclear Power Corporation of India (NPCIL) took several financially imprudent steps that escalated the cost of the project.
“NPCIL had to resort to external borrowings at a higher interest rate due to non-provisioning for erection reserve supply contracts while availing Russian credit, which was available at a cheaper rate,” the report said.
“This resulted in additional interest cost amounting to ₹76.02 crore.”
Tendering guidelines
NPCIL had also availed of a term loan of ₹1,000 crore from HDFC Bank in violation of the Central Vigilance Commission’s guidelines on tendering, the report found.
“Unit I and Unit II of KKNPP started commercial operation after a delay of 86 months and 101 months respectively,” the report added. “The delays were primarily due to shifting of work from Russian scope to Indian scope; in execution of work and in submission of working documents/supply of equipment/materials by ASE; delays due to design changes; erection delays and additional works.”
The CAG said that while these delays resulted in cost overruns, NPCIL did not initiate any claim for recovery of additional expenses of ₹264.79 crore which were caused due to the delays.
