Discoms have to submit to CAG audit plan today

Kejriwal asks companies to respond to the plan by Wednesday

Even as power distribution companies refused to comment on the Delhi government’s move to get them audited by the Comptroller and Auditor-General, Chief Minister Arvind Kejriwal said on Tuesday that the firms had time till Wednesday to respond to the plan.

“They are being given time till tomorrow morning [Wednesday morning]… The Cabinet will meet in the evening,” Mr. Kejriwal said before he had a meeting with the CAG.

He later informed journalists that the CAG was willing to audit the discoms, and the Cabinet would examine their replies and take a decision.

The discoms, while confirming that they had received the government note, refused to comment on the development.

. In response, one company is learnt to have taken a neutral stand. However, it has pointed to a public interest litigation petition pending in the Delhi High Court on the proposed CAG audit of discoms, suggesting that no decision could be taken in contempt of court.

In case the government went ahead with its plan, a discom official said, the matter would have to be brought to the court’s knowledge.

“If the government wishes to do so, we were in principle neither for nor against it. We have in our reply said that when we took charge of power supply in 2002, we requested the CAG for an audit. But the CAG said it did not audit entities governed by the Companies Act and we should rather get the auditing done ourselves. Accordingly, for a decade, we got ourselves audited by top companies, whose names were given to the government. Following an advisory by the regulating body, about two years ago we started getting the audit done through a CAG-empanelled firm. This is besides internal auditing,” the official said.

Sources in the Delhi power distribution companies said these firms were a 51:49 per cent joint venture, and their accounts were regularly audited by CAG-empanelled auditors; these accounts were also approved by the boards of the companies comprising government nominees (the Chief Secretary, the Finance Secretary, the Power Secretary and a member nominated by the government).

Approved accounts were then submitted to the Delhi Electricity Regulatory Commission (DERC), an independent regulator, for prudence check. The DERC conducts open-house public hearings on all matters concerning consumers. The DERC and the government had recommended CAG audit of the accounts of the discoms in November 2011 and then in March 2012.