The State-run Gujarat Urja Vikas Nigam Ltd (GUVNL) extended “undue benefit” to Essar Power Gujarat Limited (EPGL) to the tune of Rs. 587 crore, the report of the Comptroller and Auditer General of India, has noted.
The findings are part of a CAG audit report on Public Sector Undertakings for the year ended March 31 2013, tabled during the monsoon session of the State legislature in Gandhinagar on Friday.
The GUVNL entered into a contract with EPGL and signed a public private alliance (PPA) with the company for the purchase of 1,000 MW power.
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The two agencies fixed the “delivery point of power procurement as the 220 KV Vadinar substation without consulting the State Transmission Utility. However, it was found that the said Vadinar substation did not exist. The Gujarat Energy Transmission Corporation Limited (GETCO) then set up a 400 KV switch yard as the new delivery point.
The change in delivery point resulted in “a saving to EPGL of Rs. 52 crore as they were not required to construct the transmission lines...Further, the change also resulted in saving in line losses worth Rs. 21.42 crore per annum to EPGL. The saving was not passed on to GUVNL as the tariff had been quoted based on the higher cost of delivery and there was no enabling provision in the PPA to pass on such saving at a later stage.”