 "CAG spots Rs 9,034-cr financial lapses by various PSUs")
The Comptroller and Auditor General (CAG) has pulled up public sector undertakings (PSUs), including Oil and Natural Gas Corporation (ONGC) and the National Textiles Corporation, for non-compliance of procedures and not safeguarding financial interest, besides other lapses, which led to total financial implications of Rs 9,034 crore.
CAG, in a report on compliance audit observations in PSUs for 2013-14 tabled in the Rajya Sabha on Thursday, said non-compliance with rules, directives, procedure and terms and conditions of contracts resulted in financial implications amounting to Rs 4,932 crore.
It also observed non-safeguarding of financial interest of organisations involved Rs 808.3 crore, defective planning Rs 432.4 crore and non-realisation/partial realisation of objectives Rs 7.1 crore.
“By entering into a settlement with CEL without conducting due diligence and whose terms and conditions were not approved by its board, ONGC obtained a reduction of only $0.7 million while it ended up paying a settlement sum of $32 million (Rs 149.4 crore) to CEL for out-of-court resolution,” the report said.
Besides, ONGC incurred additional expenditure of USD 66.34 million (Rs 342.34 crore) in deviation of terms approved by the Board in October 2008 for such a resolution, it added.
In the case of the National Textile Corporation, CAG said the company had entered into a settlement agreement with Hall & Anderson Ltd (HAL), the previous owner of Shree Madhusudhan Mills in Mumbai, for sharing of land "ignoring the fact that it was prime freehold land, without ascretaining commercial viability, which resulted in a loss of Rs 205.01 crore to the company".
The CAG also pulled up steel major SAIL for supplying slag to various joint venture companies much below prices "as a result of which SAIL lost Rs 156.58 crore up to 2013-14".
Besides, the report found that 10 CPSEs did not adhere to the Department of Public Enterprises guidelines with respect to payment of allowances and perks to their employees by restricting the same within the maximum ceiling of 50 per cent and made irregular payments of Rs 573.1 crore for 2007-08 to 2013-14.
The report disclosed that seven PSUs had made recoveries worth Rs 56.6 crore.
CAG, in a report on compliance audit observations in PSUs for 2013-14 tabled in the Rajya Sabha on Thursday, said non-compliance with rules, directives, procedure and terms and conditions of contracts resulted in financial implications amounting to Rs 4,932 crore.
It also observed non-safeguarding of financial interest of organisations involved Rs 808.3 crore, defective planning Rs 432.4 crore and non-realisation/partial realisation of objectives Rs 7.1 crore.
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CAG came down heavily on ONGC for not doing due diligence while entering into an out-of-the-court settlement with a terminated contractor, Clough Engineering (CEL), Australia, which was roped in for development of a deepwater and shallow water oil and gas bearing field in Krishna Godavari basin entailing a cost of Rs 993 crore.
“By entering into a settlement with CEL without conducting due diligence and whose terms and conditions were not approved by its board, ONGC obtained a reduction of only $0.7 million while it ended up paying a settlement sum of $32 million (Rs 149.4 crore) to CEL for out-of-court resolution,” the report said.
Besides, ONGC incurred additional expenditure of USD 66.34 million (Rs 342.34 crore) in deviation of terms approved by the Board in October 2008 for such a resolution, it added.
In the case of the National Textile Corporation, CAG said the company had entered into a settlement agreement with Hall & Anderson Ltd (HAL), the previous owner of Shree Madhusudhan Mills in Mumbai, for sharing of land "ignoring the fact that it was prime freehold land, without ascretaining commercial viability, which resulted in a loss of Rs 205.01 crore to the company".
The CAG also pulled up steel major SAIL for supplying slag to various joint venture companies much below prices "as a result of which SAIL lost Rs 156.58 crore up to 2013-14".
Besides, the report found that 10 CPSEs did not adhere to the Department of Public Enterprises guidelines with respect to payment of allowances and perks to their employees by restricting the same within the maximum ceiling of 50 per cent and made irregular payments of Rs 573.1 crore for 2007-08 to 2013-14.
The report disclosed that seven PSUs had made recoveries worth Rs 56.6 crore.