The Uttarakhand Power Corporation Limited (UPCL), the sole power distribution company in the hill state, has been criticised by the Comptroller and Auditor General (CAG) for its huge accumulated losses of Rs 1,960.11 crore, which in turn eroded its entire capital and reserves by 2010-11.
“Its (UPCL) accumulated losses increased year-after-year and the entire capital including reserves was eroded by 2010-11,” CAG said following a performance audit of the government-controlled company. The CAG also censured the UPCL for failing to take adequate and effective measures for recovery of outstanding dues.
The CAG noted that accumulated losses of the company increased by Rs 1,343.84 crore from Rs 616.27 crore in 2006-07 to Rs 1,960.11 crore in 2010-11.
Current liabilities and provisions increased from Rs 1,793.38 crore during 2006-07 to Rs 3,135.38 crore in 2010-11.
The sundry debtors of the company increased by Rs 611.38 crore i.e. from Rs 1,205.37 crore in 2006-07 to Rs 1,816.75 crore in 2010-11 due to poor collection efficiency, it noted.
The cost of purchase of power increased from Rs 742.92 crore in 2006-07 to Rs 2,077.67 crore in 2010-11, as the company had to purchase power during peak hours at higher rates in excess of tariff rate fixed by the Uttarakhand Electricity Regulatory Commission (UERC).
Interest and finance charges of the company increased from Rs 53.48 crore to Rs 84.97 crore during 2006-07 to 2010-11 due to interest paid against the loan taken from Power Finance Corporation (PFC).
The CAG also noted the government did not provide any subsidy support to the company during 2006-11. According to the government’s order, the company waived off Rs 16.83 crore on account of late payment surcharge in respect of defaulting private tube wells and domestic category consumers in Haridwar district but the government failed to make any payment.
The CAG also criticised the UPCL for poor rate of electrification in the state. Out of the total 927 un-electrified villages in the state, the company electrified 591 villages up to March 2011.
The CAG asked the company to increase its distribution capacity in accordance with the pace of growth of connected load and take effective steps for recovery of outstanding dues.
