The Comptroller and Auditor General of India (CAG) said the Union Territory of Puducherry and the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC) had lost an opportunity to obtain power at a reasonable cost due to hasty and irregular selection of a private partner and because of their lackadaisical approach in executing the Naini coal block in Odisha, which was recently de-allocated based on the recommendation of an Inter Ministerial Group.
The annual report for the year ended March 2012 said the PIPDIC entered into a Memorandum of Understanding with the JR Power Gen Private Limited (JRP), which had no proven experience either in coal mining or power generation, to apply for coal allotment through Joint Venture (JV).
The report found that prior to the “suo motu” plan received from JRP, a company promoted by the family of former Union Minister of State for Information and Broadcasting S. Jagathrakshakan, the PIPDIC had no intention to apply for coal blocks.
The application for allotment was only at the behest of JRP as evidenced by the fact that the Union Territory was not even aware of the circular of Ministry of Coal informing of allocation of coal under the Government dispensation route. When JRP approached the UT, it was not even incorporated as a company and did not have any experience whatsoever either in coal mining or power production.
The CAG further stated that the decision to nominate JRP as a private partner for the project was against the canons of financial propriety and the Supreme Court judgment of December 2006 that held that public contracts were to be procured only through tenders.
