FE Home- Power - Story
Will get CAG to audit discom accounts: Govt
Ravi Bajpai

Posted: Thursday, Dec 29, 2011
New Delhi: The Delhi government has decided to have accounts of private power distribution companies audited by the Comptroller and Auditor General of India (CAG).

The state Cabinet took the decision at a meeting on Monday when it decided to infuse Rs 500 crore equity into power supplier BSES to help it repay its debts to suppliers.

“The issue of audit came up as this is the first time the government is increasing equity since the companies were launched in 2002. It was felt an audit of their accounts since their inception is necessary,” said a government official.

The government has a 49 per cent stake in the the city’s three main power distribution companies — the BSES Yamuna Power Limited, the BSES Rajdhani Power Limited and the North Delhi Power Limited.

The government had last month informed the Delhi High Court that it was open to an occasional CAG audit of the companies’ accounts.

But this is the first time the state cabinet has taken up the issue of auditing of the companies’ accounts and decided in favour of it, a senior official said.

The High Court had sought the government’s reply on a public interest litigation by the United RWA Joint Action seeking a CAG audit, alleging that power companies faked losses to jack up the electricity tariff.

The court issued notices after the Delhi Electricity Regulatory Commission (DERC) admitted it does not verify financial statements furnished by the companies while fixing tariff, as the rules did not necessitate it.

In its affidavit to the court, the government also referred to a letter sent by DERC last year asking the government to request the CAG to audit the accounts of the discoms since their inception.

However, according to the affadavit, the government said it had “no locus standi in law to accede to the request of the DERC, as there was no such enabling provision under the Acts concerned”.

“It is submitted that while a routine audit by the CAG every year may not be desirable, given the need to carry the conviction of the general public/ consumers about the authenticity of the claims of the discoms, it may be desirable to get the occasional CAG audit done,” the affidavit, endorsed by the Power Secretary, stated.

“The Cabinet’s consent for the audit has formally been put on record now. But the government cannot do anything more right now since the matter is already in the High Court,” the official said.